Rents have been pretty steady for the past year, which after the double-digit increases of a couple of years ago, is an improvement for renters. 

According to a new analysis from Redfin, the median asking rent, nationally, has actually declined slightly for the last four months. Though, it’s only down about $63 from its peak in 2022. 

The main reason rents are steady or even declining slightly? Construction of new apartments is near a 50-year high. However, it is starting to slow down.  

This is your classic Econ 101 supply-and-demand story: There’s not enough rental housing to meet demand, so prices rise. Then developers start building a bunch of new apartments, and once all those new apartments go on the market, rents start to come down a little.

“It's encouraging when the data matches up to theory,” said Jenny Schuetz at Arnold Ventures. “So, very exciting to see that when you build a lot of new apartments, apartments become cheaper over time.”

Still, rents aren’t getting cheaper everywhere or — for everyone. 

“Where we really don't see much softening is at the very bottom of the market,” said Schuetz. “And much of this is just because the lowest cost apartments are charging about what they need to in order to break even.”

There’s also a lot of competition for those cheaper apartments because there just aren’t that many of them. 

Alexander Hermann at Harvard’s Joint Center for Housing Studies said where you live also makes a big difference.

“Austin's the poster child for rents declining right now, right,” Hermann said. “And there are other markets, especially in the South, but also in the West, where you see rent declines. But every single market in the Northeast and Midwest continue to see their rents rise.”

That’s because in those markets there hasn’t been nearly as much new construction. Almost half of all apartments finished last year were in the South. 

But now, nationwide?

“Because of high interest rates, because of this modest rent growth, and because of competition from new units,” Hermann said. “There's been a significant slowdown in apartment construction really over the past year.”

That’s happening as more people than ever are renting, largely because it’s so expensive to buy.

“The two markets are very, very linked,” said Laurie Goodman at the Urban Institute.

Given how high home prices and mortgage rates are, she added, “It is now substantially less expensive to rent than it is to buy a new home for most people in most parts of the country.”

But, she said as multifamily construction slows down, rents will start to go up again and that balance is likely to shift.