Nationally, asking rents fell 0.4% in April and May, following nearly a decade of solid growth, a new report from Yardi Matrix revealed.
Between January 2015 and the first quarter of 2020, before COVID-19 hit, asking rents grew a considerable 26% nationally.
But that trend got thrown for a loop with COVID-19, and the report shows that 71 metros saw rents decline in April and May, while 35 saw rents increase. The study covered 107 metros.
“Rents of luxury lifestyle units nationally decreased by 1.2%, compared to a decline of only 0.5% for working-class renter-by-necessity units,” the report said. “New units coming online are taking longer to lease up, prompting owners of more expensive units to offer concessions or lower rents to attract tenants.”
Yardi Matrix said that asking rents are likely to drop more throughout the year, as demand continues to go down.
The biggest decrease was in San Diego, with a loss of 1.8%, followed closely by San Jose and Nashville, with a loss of 1.7%.
Of the 18 metros that saw rent growth of 0.6% or more, none were among the top 20 largest by population, Yardi Matrix said.
Omaha, Nebraska; Cleveland; Columbus, Ohio; and Toledo, Ohio all saw rent growth of 0.8%, while Grand Rapids, Michigan; St. Louis; Wichita, Kansas; and South Bend, Indiana saw gains of 0.6%.
Since the pandemic started, Portland, Maine saw the most rent growth at 1.7% in April and May, followed by Mobile, Alabama and Memphis, Tennessee, which both saw rent growth at 1.3%.
Despite rents going down, 31% of renters don’t think they will be able to make next month’s payment on time.