Sun Belt states are seeing rent declines of as much as 7% thanks to a surplus of apartments.
Brandon Bell
The country's steepest rent declines are happening in metro areas across the Sun Belt as pandemic-era demand spikes subside, Redfin reported Friday.
Leading the regional trend is Austin, Texas, where rent fell 6.6% on an annual basis last month. Runner-ups included Nashville, Tennessee, Jacksonville, Miami, and San Diego.
"The Sun Belt has built a ton of new apartments in recent years, partly to meet the surge in demand brought on by the flood of people who moved in during the pandemic housing boom," Redfin Senior Economist Sheharyar Bokhari said in the report. "But the boom is over, and now property owners are struggling to fill vacancies, which is causing rents to fall."
For renters, it's a welcome sight: in recent years, a lack of apartment units, the rise of remote work, and a hard-to-breach housing market have sent rent pricing soaring.
Nationally, the biggest rent drop actually took place not in the Sun Belt, but in Seattle, Washington. Median asking rent fell 7.3% year-over-year in the Northwestern city, Redfin cited. But the reasons were no different — like the Sun Belt, the metro witnessed a boom in construction.
Outside of these areas, the trend isn't a nationwide phenomenon. In fact, US asking rent rose 1% to $1,648, marking its first gain in a year as home builders grapple to catch up with demand.
According to CBRE's 2024 market outlook, 440,000 new units are expected to come online this year, potentially helping slow rent growth. At the same time, construction is expected to slow through the year, worn down by weak fundamentals and high interest rates.
As with rent, Redfin separately found that a property surplus has also sent housing prices lower, at least in Florida and Texas. Both Sun Belt states sped up construction during the pandemic to make room for a wave of remote workers, but years later, that's left behind a supply glut.
