Apartment Rent Cuts Return for First Time Since Pandemic

Apartment rents have dipped slightly as occupancy softens, heralding the return of mild annual rent cuts following recent resiliency, according to a RealPage analysis. The average effective rent across the country fell 0.2% year-over-year in August, and 0.4% month-over-month, to $1,882.

Annual price increases have been negligible for some time, noted RealPage. This is the first time annual rent cuts have emerged since March 2021. The decrease comes as occupancy fell to 95.4% during the month, down 10 basis points from July, which matched the market’s five-year average. Year-over-year occupancy was up 130 bps, said the report.

Much of the decline can be attributed to markets in the South and West regions, which accounted for all of the major markets that saw rent cuts during the past year. Rents in the South fell 1.7% while prices in the West dropped 0.5% year-over-year.

The South continues to deal with extreme supply volumes, which have kept rent growth in the negative since mid-2023 in the region. In addition, some markets that experienced rent declines, such as Orlando and Las Vegas, depend heavily on tourism, which has been softer as consumers tighten discretionary spending on travel. Other markets that continue to see deep rent cuts are supply-heavy areas like Austin, Denver, Phoenix, Dallas and Charlotte.