If you’re a renter and had “save more money” on your 2024 New Year’s resolution list, there’s good news for you. According to many industry experts, less aggressive rent hikes—a trend that began in 2023—are expected to continue into 2024. “The rental market is stabilizing after the wild fluctuations we’ve seen in recent years,” Emily McDonald, Zillow’s rental trends expert, tells AD over email. “It seems both tenants and housing providers are adjusting to a more balanced market, where rent growth is consistent but not as aggressive as before.”
Last year, cities across the US saw either slight dips or relatively small increases in rent thanks to more new builds and a greater supply of available units, making it harder for landlords to raise prices. According to the Wall Street Journal, that same driver will likely keep rent from jumping too much these next 12 months as well, with many data companies and real estate firms projecting total rent growth to be in the low single digits in 2024. “This is definitely in line with what we’re seeing in Zillow’s data,” McDonald adds. “Our latest rent report shows a trend toward modest rent increases, mostly in the low single digits.”
For many renters, this is a welcome relief after two taxing years of rent spikes. According to Apartment List, an online marketplace for apartment listings, rent prices surged consistently in both 2021 and 2022, peaking with just under 18% year-over-year growth in late 2021. In contrast, national rent averages were slightly cheaper at the end of 2023 compared to the same time the previous year, with average year-over-year rent growth standing at negative 1.1%. However, according to their data, the national median rent is still about $250 per month higher than it was three years ago. In short: Though rent prices may not be as low as they once were, landlords no longer hold the economic power to jack payments through their tenant’s modest multifamily roofs.
The balancing market may mean that those searching for a new apartment will find another welcome surprise when perusing available listings: rent concessions. According to a November 2023 Zillow report, special offers to entice renters—such as a free month, free amenities, waived pet fees, or lower security deposits—are on the rise as landlords compete with each other for tenants. In October of 2023, a third of rentals listed on Zillow offered some form of concessions. So far, this trend has continued.
“Zillow’s most recent data shows that the share of concessions grew to 32% in November 2023,” McDonald says. “We anticipate concessions will continue to be common, especially in places that have had a lot of multifamily construction over the past couple of years.” With that, she advises renters see these as an opportunity but remain shrewd. “For example, a free month’s rent might mean a higher rent bill on the months you are paying,” McDonald explains. “Always read the fine print and consider the total cost of the lease term, not just the upfront savings.”
Other factors that are tipping the scales of demand include the continued prevalence of remote work and changing consumer preferences. “Remote work policies have enabled people to move away from high-cost urban areas to more affordable locations, impacting demand in traditionally expensive markets,” McDonald explains. Evolving demographics and lifestyle preferences are also playing a role, she notes. “Renters are increasingly looking for specific amenities, like backyards, and more space,” she says.
Though national data reflects generally positive reports for tenants, rent trends in 2024 will ultimately vary by location. In New York City, one of the country’s most notoriously competitive markets, StreetEasy predicts that though rental prices may not jump aggressively, a sharp drop in monthly payments to landlords is unlikely. But the same can’t be said for all cities. “As of November 2023, a trend has emerged in Austin, San Francisco, and Portland, where rent prices are on a noticeable decline,” McDonald says. “These cities stand out as they’re the only metro areas where rents in November 2023 were lower than the previous year.”
