Vgajic | E+ | Getty Images
If you’re a renter, the market may be shifting in your favor.
As of December, the median asking rent price in the U.S. was $1,695, down 0.5% — or $8 — from November, according to a new report by Realtor.com.
The latest rent price is 1.1% lower — or $18 — from a year before, and down 3.7% from peak highs in July 2022.
We’re calling it a renter’s market.
Daryl Fairweather
chief economist at Redfin, an online real estate brokerage firm
Rental affordability is improving in part because of a “construction boom” of new apartment buildings during the pandemic, according to Daryl Fairweather, chief economist at Redfin.
“There are still units coming online now from projects that were started back in 2021, 2022,” she said.
With more new units available, some property managers are considering lowering their asking prices to attract tenants, experts say.
This means renters should have more negotiating power when it comes to the terms of their leases, Fairweather explained.
“We’re calling it a renter’s market. We think that’s going to continue for the next year,” she said.
More from Personal Finance:
This should be your ‘last resort’ to cover an emergency expense
Your tax return could be ‘flagged for audit’ without these forms
Changes Americans would make to close social security’s financial gap
To be sure, the volume of newly built apartments is concentrated in some areas more than others, making rent prices decline faster in certain parts of the country.
By way of example, Austin, Texas, where the median rent is $1,394 as of December, saw some of the highest levels of multifamily housing construction over the past few years, according to Redfin. That figure is down from $1,482 in August when the median price fell 17.6% from a year prior.
Rents in Austin are likely to continue to fall as supply grows and demand balances itself out, experts say.
What you’re able to leverage as a renter will depend on what’s happening in your current market or where you plan to live.
Here are three key steps to consider if you’re on the rental market this year:
1. Find out what other units are renting for in the area
You might live in an area that is becoming more affordable. To find out, compare what other units in the neighborhood similar to yours are renting for — it’s the “best way to arm yourself” in negotiations with your landlord or property manager, Fairweather said.
“If your property manager is trying to raise your rent, you can come to them with information to show them that your rent shouldn’t be increased,” she said. “In some markets, it should even go down.”
If you’ve been living in the same unit for a couple years and have consistently paid rent on time, try to use that history to negotiate for a lower monthly rent, said Joel Berner, a senior economist at Realtor.com.
A “good point to negotiate from” is to show your landlord that rent prices are coming down for similar properties but you have no desire to move ― unless you can save money elsewhere, he said.
Tenant turnover can be expensive for landlords, especially if the property sits unoccupied for a few months.
2. Negotiate any additional fees you pay
On that note, think about what other costs you pay for in addition to your rent, Fairweather said. These can be fees for parking space or access to other amenities.
Fees for amenities like a parking garage, a shared community space, an on-site fitness center or bike storage can range from $30 a month for basic offerings or one-time charges of $200 to $500, according to Apartment List.
If you see ads where other properties are calling out concessions like waived parking costs or reduced fees for an amenity, see if your landlord is willing to match that.
3. Consider teaming up with housemates
Meanwhile, if you’re living in an area that’s still “really expensive to rent,” consider splitting a larger unit with other people, Berner said.
Having roommates or housemates is a tried-and-true way to lower housing costs. It’s more effective now because the cost for larger units in some places is not growing as fast as rents for smaller units, he said.
“You can find a pretty good deal on maybe a three-bedroom apartment and split it with other folks,” he said.
#renters #market #heres #advantage
