Since the start of the pandemic, monthly rents have plummeted in some of the country’s largest housing markets. But a new report suggests that a turnaround could be coming.
The median rent nationwide was up 0.6% from a year ago in February, at $1,542, according to a new report from Realtor.com. That figure suggests that rents are stabilizing nationwide, after falling in many major cities as a result of migration trends caused by the COVID-19 pandemic.
But in some cities, rents have begun to increase in earnest. In New Orleans, rents were up 18.7% year-over-year. Other cities that saw double-digit percentage increases in rental costs, including Sacramento, Calif., Memphis, Tenn. and Riverside, Calif.
“Rents may have hit their bottom in many markets,” Realtor.com chief economist Danielle Hale said in the report. “With the COVID-19 vaccination rates improving, returning to work and the city may be on the minds of many.”
(Realtor.com is operated by News Corp
subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)
With rents possibly at their low point, tenants in certain cities stand to save by locking in leases now. That’s especially true in major tech hubs, where the cost of housing has dropped significant for renters.
“Housing markets like San Francisco, Santa Clara, Calif., Boston and Seattle have seen rents decline by double digits since the start of the pandemic,” Hale said.
Renters in San Jose, Calif., could see the largest savings as a result of the pandemic downturn. The monthly rent as of February was $2,690, down from $3,100 a year ago. That equates to $410 a month in savings, nearly $5,000 for a 12-month lease.
Other cities where rents have fallen by more than $100 per month over the course of the pandemic include San Francisco, Boston, Seattle, Los Angeles and Washington, D.C.
“For those looking to capitalize on rock-bottom rents, finding a new unit now could make sense,” Hale said. “You’ll not only save money, you’ll have less competition finding the location that’s best for you.”