The Housing Market Is Worse Than You Think

Are rents finally cooling?

There may be some moderate relief for renters, but a return to prepandemic pricing isn’t likely, analysts said.

After record levels of demand for rental housing in 2021, there has been a significant slowdown in leasing this year, and price growth is also beginning to slow, according to Jay Parsons, the head of economics for RealPage, a rental housing software company.

Demand for market-rate rentals in the third quarter was negative, meaning there were more people moving out of apartments than into them — the first time this has happened in the typically busy summer months in 30 years, Mr. Parsons said.

The slowdown led to the first month-to-month price reduction since December 2020 — a measly 0.2 percent drop in September. Still, the national market-rate rent — $1,797 a month — was up 9 percent from the same month a year ago, in part because inventory remains low.

RealPage predicts that national market-rate rent will rise 3.3 percent next year, which is more in line with typical rent growth.

That is cold comfort for renters in high-cost markets like New York City, where rent growth outpaced increases in wages by 23 percent in August, when adjusted for inflation, according to Kenny Lee, an economist with StreetEasy, a listing website. Besides the major real estate disruption early in the pandemic, that marks the widest gap since the 2008 financial crisis.

The median rent in September, $3,982, was up nearly 24 percent from a year ago, though it was down 2 percent from the previous month, according to a report from Douglas Elliman, a real estate brokerage. Renters could have more leverage in the typically slower winter months, said Jon Leckie, a researcher with Rent, a listing portal.

“If you’ve got a few months to work with, and you don’t need to sign now, I’d just hold off,” he said.

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