Apartments.com Rent Report for May 2024: Louisville Takes the Reins

As far as rent trends go, there were two clear standouts in May for very different reasons: Louisville, Kentucky and Austin, Texas. While Louisville rent prices galloped ahead of the pack, Austin’s rent prices barely left the starting gate.

According to the Apartments.com Monthly Rent Report for May 2024, one thing is clear: rent prices are starting to inch higher. While some cities remain a bargain for renters, the overall trend is ticking upward. This is particularly evident in mid-priced apartments, where demand is outpacing supply. According to CoStar data, rent for mid-priced apartments is 1.4% higher than last year.

Almost all the cities with a decline in rent prices are in the Sun Belt, where supply is still outpacing demand. Cities that experienced significant construction booms over the past few years are now seeing a surplus of available units, leading to more competitive pricing for renters.

Is the Sun Setting on Affordable Rent in the Sun Belt?

Last year, we saw a remarkable surge in new apartment buildings coming onto the market, marking a 40-year high. This boom resulted from a significant increase in construction during the pandemic. In fact, 520,000 new apartments came available in 2023, thanks to the construction of just over a million new apartment communities. Most of this building took place in the Sun Belt, which saw a drop in demand after the pandemic just as all the new apartments became available, causing a significant increase in the vacancy rate. While rent prices are still trending downward for most Sun Belt cities, this trend is slowing down and might even reverse. This is because far fewer apartment buildings are under construction while the demand for apartments is increasing. According to CoStar, renters could see prices inch upward toward the end of the year and into 2025.

Last month, most of the biggest rent increases occurred in the Midwest. While several Midwestern cities continued to experience rent increases, May saw a surge in higher rents in more cities across the Northeast and West. The cities with the biggest rent drops year over year were all in the Sun Belt, with Florida and Texas both having multiple cities in the top 10. Let’s take a closer look at the top five in each category.

Cities with the Biggest Rent Increases

In April, San Jose, California saw the biggest rent increase at 2.4% year over year. Despite rent prices continuing to climb, currently up 3.6% year over year for an average rent of $2,516, San Jose didn’t make the top five for May. Instead, the city in the rent growth winner’s circle is Louisville, Kentucky. Rent prices in Louisville rose higher in May than in any other major US city, now more than five percentage points higher than last year for an average rent of $1,080 per month. This growth surpasses that of Cleveland, Ohio, the runner-up, which saw a 3.6% increase. Louisville is the only city to repeat in May’s top five; it was second in April. The other cities in April’s top five were Seattle, Washington; Milwaukee, Wisconsin; and San Francisco, California.

So, why Louisville? There hasn’t been a lot of construction in Louisville in recent years, so there are fewer apartments to choose from. This has resulted in Louisville having a vacancy rate below the national average of 7.9 percent, sitting at around 7.2 percent. The economy is strong in Louisville. It’s home to the legendary Kentucky Derby, which draws thousands of tourists to the area each year, and it’s the location of several Fortune 500 companies like Yum! Brands and Kindred Healthcare. There are several universities in the area, keeping rentals in higher demand. However, even though Louisville renters are paying more than they did last year, rent in Louisville is still relatively low when compared to the national average of $1,517 per month.  

In May 2024, these five cities saw the biggest rent increases:

1. Louisville, KY (5.1%)
2. Cleveland, OH (3.6%)
3. Kansas City, MO (3.5%)
4. Washington, DC (3.4%)
5. Columbus, OH (3.1%)

Cities with the Biggest Rent Declines

Last month, only two of the top 50 markets experienced rent decreases, both located in Texas: San Antonio and Austin. All other major cities saw either slight increases or stable rent growth. However, May painted a different picture, with rent declines in 14 of the top 50 markets. Almost all the cities with decreasing rents were in the Sun Belt, particularly in Florida and Texas.

While Louisville led with a 5.1% rent increase, Austin saw nearly the opposite trend, with rent prices dropping by 5.2% year over year. Austin currently has the highest multifamily vacancy rate in the country at 14.8%, far exceeding the national vacancy rate of 7.9%.

The reason the vacancy rate is so high is because of a building frenzy that took place during the pandemic. During this time, Austin saw an influx of nearly 100,000 new residents, which caused rental demand to spike. Developers raced to meet this demand, but as the pandemic subsided, the demand for rentals eased while construction projects continued.

While many Sun Belt cities experienced similar scenarios, Austin’s construction projects were more extensive than any other market. This oversupply of vacant apartments, coupled with less renter demand, has caused rent prices in Austin to fall to $1,449 per month, which is 4% below the national average.

In May 2024, these five cities saw the biggest rent declines:

1. Austin, TX (-5.2%)
2. Raleigh, NC (-3.0%)
3. Jacksonville, FL (-2.6%)
4. Atlanta, GA (-2.4%)
5. Charlotte, NC (-2.0%)

Expectations for the Last Half of 2024

As we move closer to 2025, renters in the Midwest, Northeast, and parts of the West may see increasing rent prices due to continued demand for rentals and limited housing supply. Those in the Sun Belt will likely enjoy a more favorable rental market, since rent here should continue to decline, at least temporarily, due to the oversupply of apartments and less demand.

When it comes to luxury apartments, renters will find lower rent prices and more availability. The luxury market has a surplus of available apartments, resulting in lower rents and attractive rent concessions. As the vacancy rate for luxury apartments is approaching double digits, it might be quite some time before rent prices for these apartments stabilize.

Current Rent Prices Across the US

Want to see what rents are doing where you live? Here’s a look at current rent prices in cities across the country: 

How Current Rent Prices Impact Renters

While it varies depending on location, the nationwide trend suggests a tightening market. Renters, especially those looking for mid-priced apartments, may experience more difficulty finding availability and higher rent prices. However, those searching for luxury apartments, especially in the Sun Belt, should find more availability and lower prices.

If you’re preparing to move, learn more about what you can expect by comparing the rent prices from this report to those from April and March to determine the overall trend and visit the US Rent Trends page to view the most current rent prices available across the US based on CoStar data.