The multifamily slide continues, offering renters more relief on larger units
Two-Bedroom Apartments Lead Rent Declines Nationwide
KEY TAKEAWAYS
- Two-bedroom apartments posted the largest year-over-year rent decline at 1.7%.
- Overall multifamily rents have fallen for over 30 consecutive months across major US metros.
- Renting remains more affordable than homeownership, with a 55% average monthly cost gap.
- Despite recent declines, rents remain about 17% higher than in 2019.
Two-Bedroom Units See Steepest Drop
The multifamily sector’s rent slide continued in March, extending beyond 30 months of annual declines, reports Globe St. Two-bedroom apartments recorded the steepest drop. Median asking rents fell 1.7% year-over-year to $1,859. This decline outpaced both studio and one-bedroom units. Meanwhile, studio rents dropped 0.7% to $1,410. One-bedroom rents declined 1.1% to $1,563. Realtor.com reported the data across the 50 largest US metros.
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Rental Costs Outpace Homeownership Affordability
Despite falling from their 2022 highs, multifamily rents, including two-bedroom apartments, remain elevated—still about 17% above pre-pandemic levels. The gulf between renting and buying also endures: the average monthly cost to purchase a starter home is $920 higher than renting, a 55% difference, keeping many households in the multifamily market. Major cities with higher home prices see an even larger cost advantage for renters.
Market Outlook Remains Favorable for Renters
The narrowing rent-buy gap signals slight rebalancing as home prices and mortgage rates ease. However, persistent affordability barriers keep most prospective buyers renting. According to Realtor.com, as new supply continues, seasonal rent upticks are expected, but annual declines—particularly for two-bedroom apartments—are likely to persist well into the year. This trend mirrors broader pricing pressure across multifamily assets, where values have also been adjusting under sustained demand softness. The deepest discounts, for now, remain concentrated in larger units.
Source: CRE Daily
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