After multifamily REITs set near-record renewal rates through the first half of the year, renters are starting to look for new options that save them money or increase their square footage.
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Apartment asking rents fell 2.2% in August, the 25th month in a row for year-over-year declines and the first month-over-month decrease since March, according to the Realtor.com August Monthly Rent Report. The $38 decrease in the nation's 50 largest metros brought the median asking rent to $1,713, which was still nearly $250 higher than the prepandemic level.
Median rents dropped across all apartment size categories, which coincides with the expected seasonal slowdown. Two-bedroom units led the way with a $42 decrease of $1,897, which was a 2.2% decline YOY.
That is sending renters out looking for a U-Haul.
"Rental declines across the majority of markets in various-sized homes are providing new options for renters, who have been squeezed by significant increases since the pandemic," Realtor.com Chief Economist Danielle Hale said in a statement.
A desire for a larger apartment and increased affordability were the top reasons for a modest increase in renter mobility last month, according to the report.
Large multifamily REITs reported some of the lowest turnover rates in their histories during the first quarter, and Q2 retention remained historically high.
While around half of apartment renters have historically opted not to renew their leases, that percentage dropped to between 30% and 35% in the portfolios of major multifamily landlords during Q1.
Atlanta and Las Vegas are among the best opportunities for renters considering a move, as they have experienced the biggest rental price drops from their peaks. Each market was down 13.6% from its highest rental price, according to Realtor.com.
"Renters focused on affordability are often willing to make compromises, like choosing a longer commute, fewer amenities or fewer on-site services," Realtor.com economist Jiayi Xu said in a statement. "It shows that many households are carefully weighing costs against lifestyle, making trade-offs to find a home that better fits their budget."
The website also found optimism about home ownership was strong despite many renters continuing to be priced out of buying. The median age of first-time homebuyers rose to 38 last year, three years older than it was in 2023.
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