Is Renting Less or More Expensive? It Depends Which Data Report You Cite

A pair of newly published data reports offer strikingly different views of the rental housing market, with one report stating rents are going down and the other claiming rents have become more expensive.

Redfin (NASDAQ: RDFN) reported the median asking rent of April was $1,625, down 1% year-over-year for the biggest decline since February 2024. Last month’s level was also $80 below the August 2022 record high of $1,705.

On a month-over-month basis, the median asking rent was up 1.2%, which Redfin said was typical for this time of year. April marked the 14th-straight month in which asking rents barely decreased or increased, with a year-over-year change of 1% or less during each of those months.

Redfin also observed the rental vacancy rate for buildings with five or more units was 8.2% in the first quarter, the most recent period for which data is available. Less than half of newly built apartments are getting rented out within three months, one of the lowest shares on record.

“Asking rents are sluggish because there are more apartments for rent than people who want to rent them,” said Redfin Senior Economist Sheharyar Bokhari. “Renter demand is strong, but growth in apartment supply is even stronger because multifamily construction surged in the wake of the pandemic moving frenzy. Permits to build apartments have started to taper off, though, so asking rents could rebound in the coming months.”

Redfin noted the typical homebuyer needs to earn over $50,000 more than the typical renter to afford monthly housing payments. However, Zillow (NASDAQ: Z, ZG) issued a report that found renters today need to earn more than $80,000 to comfortably afford the typical rental, up from $60,000 five years ago. Zillow added that in eight major metro areas – New York City, Boston, San Diego, Los Angeles, Miami and Riverside, California – renters need to make six figures to comfortably afford rent.

Zillow added that rent for a typical apartment has increased by 28.7% to $1,858 since April 2020 while rent for a single-family home increased by 42.9%, to $2,256. Over that time, the median household income1 has only risen by 22.5% to about $82,000.

“Housing costs have surged since pre-pandemic, with rents growing quite a bit faster than wages,” said Orphe Divounguy, senior economist at Zillow. “This often leaves little room for other expenses, making it particularly difficult for those hoping to save for a down payment on a future home. High upfront costs are often overlooked, which can keep renters in their current homes.”