Rent prices fell overall last month, posting their first decline in 2020, according to data from Realtor.com. But rents in the Midwest surged 4.5% in May, a sign that more tenants are showing interest in the region. The US housing market has never been more unaffordable, experts say. Loading Something is loading.
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Rents are falling across most of the US – but they’re surging in six Midwestern cities as more renters flock to the region amid poor housing affordability across much of the country.
Rents in the 50 largest metropolitan areas fell 0.5% year-over-year during the month of May, posting their first yearly decline since 2020, according to data from Realtor.com.
But while rent prices are falling overall, rents in the Midwest US are still growing, with the median asking rent price in the region rising 4.5% year-over-year last month, the research firm said.
Rent increases blew past 5% in the six largest cities in the region. Columbus, Ohio saw the fastest increase, with rents growing 9.3% over the last year. Rents increased 7.7% in St. Louis, Missouri, 7.5% in Cincinnati, Ohio, 7.3% in Indianapolis, Indiana, 6.2% in Milwaukee, Wisconsin, and 5.1% in Detroit, Michigan.
Meanwhile, rent prices fell 3% in the West and 0.7% in the South.
The different direction in rent prices is largely due poor affordability across the housing market, which has forced cash-strapped homebuyers and renters into areas with lower prices and stronger employment prospects.
“As the Midwest markets tend to have greater affordability, the stronger growth in these markets likely results from this benefit even as it may reduce existing affordability,” Realtor.com chief economist Danielle Hale said in a note. “In addition, as the unemployment rate decreased from 3.2% to 2.8% over the past 12 months, the stronger job market could also boost the rental demand in this region.”
Meanwhile, rents have largely fallen in areas outside the Midwest thanks to the growing supply of units, with more homeowners opting to rent their home while they wait for the market to rebound, a Redfin real estate agent said.
Mortgage rates hovering near a 20-year-high have discouraged existing homeowners to list their properties for sale, as many are looking to cling to the historically low interest rates at which they financed their home years ago.