Smallest Multifamily Units Still Commanding Premium Rents

Whether you are looking to downsize, change apartments, or get into the rental market for the first time, the good news is that rents are trending downward—a trend that has been occurring for the last eight months. 

According to a new article by Realtor.com—authored by Jiayi Xu and Chief Economist Danielle Hale—in December 2023, the U.S. median rent continued to see a year-over-year decline, now down 0.4% for 0-2 bedroom apartments across the top 50 metropolitan areas in the country. 

The median asking rent for all apartment sizes now sits at $1,713, down by a paltry $4 from last month and $63 (-3.5%) since the price peak in July 2022. However, this number is still $309 higher, or 22%, from numbers recorded before the pandemic. 

The 2023 rental market experienced a significant shift in momentum; the influx of record-high multi-family homes exerted downward pressure on median asking rent, which has resulted in the eight months of falling rent prices. 

Renters experienced a welcome reprieve, as the year did not witness a new peak in rent prices. Looking forward, Realtor.com anticipates continued weakness in the rental market for 2024, as the completion of much-needed supply is expected to further impact the dynamics. 

By the numbers, rent declined for all unit types; two bedroom units stood at $1,896 per month (down $73 or 3.7% from July 2022’s peak); one bedroom units stood at $1,593 (down $59 from the peak); and studios median rent was $1,437 (down $34 or –2.3% from the peak). 

The median rent of studios was still $206 (or 16.7%) higher than before the pandemic, now some four years ago, which represents a significant jump that is only slightly smaller than seen in larger units.