Standing with her boyfriend Carson McDonald on June 4, Chloe Troub finds the notion of a renter’s market insulting due to the high rent costs. Stephan Bisaha/NPR reports that in Nashville, Tenn., landlords seem to come to the tenants. Mason Comans experienced this firsthand while searching for an apartment. He received texts from property managers offering one, two, or even three months of free rent.
According to Zillow senior economist Kara Ng, 2023 is favorable for renters. Nationally, rent prices rise slower than wages and inflation, with an increase of 1.9% year-over-year in April. By comparison, consumer prices rose 4.2% in May. Realtor.com figures indicate a 1.5% decrease in rent year-over-year. Ng further notes that a record 39.8% of rentals on Zillow offered incentives like waived fees and free rent in April.
These concessions provide financial relief for families facing costs such as power bills and gasoline. Yet, the impact on renters varies by location, as real estate dynamics depend significantly on geography.
An Apartment Construction Boom
The disparity between rent increases and inflation is largely due to supply and demand, with a surge in apartment construction. In 2024, the U.S. constructed 600,000 apartment units, the highest in 38 years. This increased supply surpasses demand, with the rental vacancy rate reaching 7.3%, the highest in over a decade.
However, this new housing isn’t evenly spread across the country. Sun Belt cities like Nashville, Phoenix, and Austin witness a significant rise in apartment buildings, leading to more tenant incentives.
“There’s a lot of apartment buildings hitting the market all at once,”
Ng explains, noting managers are using incentives to attract new renters. Yet, in Chicago, rent tells a different story.
Chloe Troub finds it offensive to label Chicago as a renter’s market due to increasing costs. Chicago saw a significant rent rise of 5.4% year-over-year in April. Troub, currently renting a one-bedroom apartment for $1,600, discovered the cheapest larger option was a $2,000 sublet. This increase would eliminate her boyfriend’s recent raise.
When Troub informed the sublessor the price was unaffordable, he wasn’t concerned, having 12 other interested parties.
The Renter’s Market Fine Print
Several factors complicate the renter’s market. Firstly, move-in incentives are temporary. Michelle Becker of Adaro Realty in Nashville emphasizes tenants often face annual rent increases once locked into a lease.
Mason Comans, a Nashville resident, benefits from frequent moves to secure new deals, experiencing four moves in five years. His new apartment offers amenities and free rent for over two months, but future free rent requires relocating again.
Additionally, rent remains costly. Average rent rose 36.9% since the start of the COVID-19 pandemic, according to Zillow. Even Comans pays more than before, at $1,800 monthly.
“It is a lot of money,” Comans states, acknowledging the ongoing challenge of managing rising rent costs.