The third quarter of each year is typically the busiest time for apartment rentals, but amid peak inflation and economic uncertainty, demand is falling, according to CNBC. Rental technology platform RealPage recorded its first Q3 drop in the 30 years it’s been tracking the metric, a decrease of more than 82,000 units nationally at the start of the fall season.
High rents coupled with inflated costs for everyday goods are pricing out renters across the U.S., but a slowdown in demand is also leading to a deceleration in price growth. Despite waning rental demand, apartment construction is at a 40-year high, a red flag for investors that likely ensures rents won’t reaccelerate even once renters make their way back into the market.
“Soft leasing numbers coupled with weak home sales point to low consumer confidence,” said Jay Parsons, head of economics and industry principals at RealPage. “Inflation and economic uncertainty are having a freezing effect on major housing decisions. When people are uncertain, human nature is to go into ‘wait and see’ mode.”
As a result of the slowdown in demand, asking rents, which had already been growing at a slower pace at the start of this year compared with last year, dropped in September for the first time since December 2020, down 0.2%.
PB Topical Ref
