Apartments.com Rent Report for October 2023: Rent Prices Still Falling

Rent prices continue to fall nationally, with October the fourth month in a row showing declining rents. However, according to the Apartments.com National Rent Report for October 2023, the period between October and November saw only a slight dip in rent prices, indicating that the downward trend may be leveling off.  

The biggest rent increases continue to be in the Midwest, with Cincinnati and Omaha seeing significant hikes. The opposite is true of the Sun Belt, where rent prices continue to fall, although only slightly. The city that saw the biggest decrease in rent was Raleigh, North Carolina, dipping 1.1%.  

Falling Rent Prices for Luxury Apartments 

The national vacancy rate currently stands at 7%, showing a slight increase compared to last year's 6%. However, the demand for luxury apartments is experiencing a decline, as reflected by a vacancy rate of approximately 9.6%. This can be attributed to the surplus of newly constructed or under-construction luxury communities. With record-high inflation, stagnant wages, and reduced disposable income, most renters are seeking apartments that are affordable rather than luxurious. As a result, the vacancy rate for luxury apartments has increased to well above the national rate. On the flip side, the demand for mid-priced apartments has held steady, and rent may soon increase for these properties.  

Rent Prices Climb in the Midwest and Northeast 

According to CoStar data, rents are on an upward trajectory in the Midwest and Northeast, especially in cities like Omaha, Northern New Jersey, Chicago, and Cincinnati. The Midwest and Northeast are seeing fewer vacancies and less construction of apartment buildings, which is keeping rent prices on a slow but steady rise.  

In Cincinnati, the vacancy rate is just 5.8%, well below the national rate. In Omaha, apartments will cost about 4.1% more than last year. In Northern New Jersey, rents are up by 3.4%, with some larger rent increases in certain cities. For example, renters in Fort Lee, New Jersey are paying 10.3% more than they were last year.  

The opposite is happening in cities like Austin, Atlanta, and Phoenix, where rents continue to fall. Rent prices in Austin have dropped by 4.7% since last year. In Atlanta, rents are down by 2.9%. 

Why Are Rent Rates Increasing in the Midwest? 

Unlike the Sun Belt, which saw a wave of new residents during the pandemic, the Midwest has remained relatively stable. Because of this stability, the region saw minimal new construction, keeping the vacancy rate relatively low. This is also the case in the Northeast, where rents are also slightly higher.  

Another factor is affordability. While rents are going up in the Midwest, it is still much more affordable than other parts of the country. For example, renters in Omaha are paying an average of $33 more in rent than they did last year. However, at $994 per month, the average rent in Omaha is still below the national average of $1,659 per month. Lower rent prices, combined with a strong job market (unemployment in the Midwest is 2.8%, well below the national average of 3.8%), has made the region more attractive to renters. 

5 cities with the biggest rent increases: 

1. Omaha, NE +4.1% 
2. Clifton, NJ +4.08% 
3. Cincinnati, OH +3.4% 
4. Chicago, IL +3.2%  
5. Louisville, KY +3.1% 

5 cities with the biggest rent declines: 

1. Austin, TX –4.7% 
2. Atlanta, GA –2.9% 
3. Phoenix, AZ –2.6% 
4. Las Vegas, NV –2.5% 
5. Orlando, FL –2.3% 

Hoboken, New Jersey took the lead last month as the city with the highest rent increases. The upward trend in rental prices continues, with tenants now paying an average of $137 more per month compared to a year ago. Overall, rent prices in Northern New Jersey are up by 3.4%, with pockets of areas seeing larger rent increases. For example, in Clifton, New Jersey, rent prices are up 4.08%.  

Last month, Atlanta topped our list of cities with the biggest rent declines, tumbling nearly 5%. This month, it saw a much smaller drop of just 2.9%. Austin, Texas saw the biggest decline in rent prices, down 4.7%. Other cities with rent declines include Phoenix, Arizona (-2.6%), Las Vegas, Nevada (-2.5%) and Orlando, Florida (-2.3%).  

Rent Prices Will Continue to Stabilize 

As rent prices settle down, renters can expect a return to normalcy, where rent fluctuations are relatively minor. CoStar projects that rents will begin to trend upward next year, mainly because of the high demand for mid-priced apartments. However, this trend likely won’t apply to the Sun Belt, where rents are not expected to increase significantly. 

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 Impacts Renters  

Rent prices in Sun Belt cities like Raleigh and Orlando continue to decline, while rent in the Midwest and Northeast continues a slow but steady climb. With rent prices expected to increase overall next year, now might be the right time to make a move. Even though prices are rising in the Midwest, overall rent is still more affordable than rent in other parts of the country. If you are planning a move to the Sun Belt, rent is less expensive now than it was last year. The northeast, especially New Jersey, continues to be expensive, so renters there might want to consider finding apartments with rent specials or looking for apartments in more affordable neighborhoods.   

No matter where (or when) you plan to move, be aware of the potential impacts changing rent prices can have on your budget and financial stability. View the September 2023 rental report to identify rent trends and help you determine if now is the right time to find a new apartment.