Rental prices ease for second month in a row

The median price of both one-bedroom and two-bedroom rentals in the U.S. fell for a second month in a row in November as the rental market continued to show signs of easing, according to a new report by the rental platform Zumper.

The national median for a one-bedroom rental fell to $1,499 in November, down by 0.4 percent, while the median for a two-bedroom rental decreased by 0.3 percent to $1,856, Zumper’s National Rent Report found.

This marks the second month in a row that prices have fallen, after the median price of a one-bedroom rental similarly declined by 0.4 percent and the price of a two-bedroom rental fell by 0.2 percent in October.

Since last November, the median price of one-bedroom and two-bedroom rentals have risen by just 0.5 percent and 0.9 percent respectively, marking the lowest year-over-year growth rate since December 2020, according to Zumper.

Year-over-year growth in rental prices climbed throughout 2021 and early 2022, reaching highs of 13.2 percent for one-bedroom homes and 14.6 percent for two-bedroom homes in April of last year, before easing over the past year and a half.

“As inflation eases, migrations slow and a record number of multifamily buildings come online, renters find themselves in a much less stressful situation than a year ago,” Zumper said in its November report.

“They have more options and less competition, and prices continue to soften in many markets,” the rental platform added.

Inflation has eased significantly since reaching a 40-year high last summer. Consumer price data from October showed prices rose by 3.2 percent over the past year, down from the 3.7 percent year-over-year increase seen in September.

However, inflation has remained well above the 2 percent target desired by the Federal Reserve, which has repeatedly raised interest rates over the last two years in an effort to rein in inflation.

Housing costs have posed a particular problem for the central bank as one of the key drivers of inflation. In both September and October, shelter costs represented the largest factor contributing to monthly increases in prices excluding food and energy.

While Fed officials previously indicated that there could be one more interest rate hike before the end of the year, many are expecting the central bank to hold rates steady at a range of 5.25 percent to 5.5 percent in December, as it did at its last two meetings.