Listed median rents across the 50 largest metro areas decreased in April

Residential rents can differ wildly depending on the market, building, or neighborhood. But according to the latest report from Realtor.com, the median listed rent across 50 of the biggest metro areas fell in April. That’s a 1.7% decrease compared to the same month last year and the 33rd month in a row that rents are down year over year.

So how can that be possible, at a time when a lot of things are getting more expensive?

Like with so many things, it all comes down to supply and demand. On the supply side of rentals, “we had this huge boom of construction from 2021 to about 2024, and that effect is still being felt,” said Joel Berner, a senior economist at Realtor.com.

That’s especially the case in the Sun Belt markets. “We had lots of movers chasing after a limited number of rental units, and that drove rents way up,” he said.

That, along with lower interest rates, incentivized construction. But now, there’s less demand, according to Jenny Schuetz, vice president of housing at Arnold Ventures.

“We have a contraction of households overall coming partly from the restrictions on immigration, so fewer people coming to the U.S.,” she said.

She also noted that fewer young people are getting their own pads, instead opting to stay with parents or roommates. Less demand for more supply means lower rents — at least, lower than they had been during that pandemic boom.

Plus, today’s increased costs won’t show up in rents immediately, because it takes a while to build new units, said Susan Wachter, a professor of real estate at the University of Pennsylvania’s Wharton School.

“Those that are going to come to market years from now will be impacted by today's higher costs, particularly for fuel costs,” she said.

Though, she added, renters are still feeling the impact of those higher costs — just not in rents necessarily, but in their utility bills.