Rent growth nationwide is still historically high, but renters who will be looking for a new home later this year have reason to feel a little more hopeful about the market.
In May, the annual increase in the country's median rent grew by the smallest amount since September 2021, according to a rental market report Realtor.com released Wednesday. And, like the country as a whole, the Philadelphia region is seeing slower rent growth.
Still, a lack of rental housing supply continues to push rents higher, although multifamily construction has picked up. The median rent nationwide reached a new high of $1,849 in May. Rents grew at an annual pace in the double digits - 15.5% - for the 10th straight month. The median rent in May 2022 was 23% higher than in May 2020, in the early months of the pandemic.
"There's no question that renters are facing sky high prices," Danielle Hale, Realtor.com's chief economist, said in a statement. "And with rising inflation reflecting price jumps for both rents and everyday expenses, many renters are feeling the strain on their finances."
Rent growth "is beginning to lose some steam" in part because incomes can't keep pace, Hale said. Rent increases have been gradually slowing since a January peak, when rents were more than 17% above the previous year.
People looking for a rental property in the Philadelphia region have faced smaller cost increases than many others across the country, according to the Realtor.com report. Of the 50 largest metropolitan areas, the Philadelphia region had one of the smallest annual increases in rent in May.
The median rent here was slightly below the national median at $1,800 - about 7.5% higher than in May 2021. The only other metros with smaller increases in median rent in May were the Detroit area (7.2%), Pittsburgh area (6.6%), the St. Louis area (6.5%), and the Minneapolis area (4.2%).
The Philadelphia metro's annual rent growth in May - 7.5% - was slightly below the area's annual growth rate of 7.6% in April and down from 8.3% in March.
Other metros still are seeing eye-popping rental growth. Rents in May rose the most annually in Miami (46%); Orlando (28%); Providence, R.I. (24%); San Diego (23%); and Tampa, Fla. (22%). Median rents in large metros across the country range from $1,000 in the Oklahoma City area to $3,253 in the San Jose, Calif., region.
Regions with fewer rental unit vacancies tend to be more expensive.
Last month, Realtor.com predicted that the national median rent would rise above $2,000 by August. But if current trends continue, that milestone is further away than expected, Realtor.com analysts said. It may even hold off until next year.