Rents Are Dropping Across the U.S.—These 3 Metros Have Had the Biggest Price Cuts

The rental market continues to work in favor of people looking to lease, as August marked the 25th straight month of year-over-year rent declines for 0-2 bedroom properties, according to the Realtor.com® August Rental Report.

The median asking rent in the 50 largest metros is $1,713—that's $46 (-2.6%) lower than its peak in August 2022, but three metros are seeing the biggest price cuts.

Rents in Las Vegas (-13.6%), Atlanta (-13.6%), and Austin, TX (-13.4%), are seeing the largest price cuts from their peaks, highlighting prime opportunities in these markets.

"Las Vegas, Austin, and Atlanta saw the largest rent declines from their peaks due to rapid rent growth during the [COVID-19] pandemic, when many people moved to warm Sun Belt areas, creating a high starting point for corrections," explains Jiayi Xu, an economist at Realtor.com.

This bodes well for people who aren't looking to buy a home.

"The rental market here has remained strong for as long as I can remember, and I’ve been licensed since 2007," Robert Little, real estate associate at Re/Max Advantage in Henderson, NV, tells Realtor.com. "I believe this stability is tied to Clark County’s continued growth. Over the past year alone, the county added a net increase of about 50,000 residents, which is up 2.1% from the year before."

The August median rent in Las Vegas is $1,443—significantly lower than the $1,671 in its peak month of June 2022.

Austin has seen a big price drop, too. The current median rent is $1,436. Its peak rent month of September 2022 saw the median at $1,659.

But it's Atlanta that is seeing the biggest rent drop compared to its peak. Currently, the median rent is $1,572. At the peak in October 2021, it was $1,820.

"Migration trends have slowed, and significant new multifamily supply has increased options for renters, exerting downward pressure on prices," says Xu. "Combined, these factors have pushed rents down more sharply than in other markets."

Moving motivation

With rents declining, renters are also on the move. In a Realtor.com survey, renters were asked their reasons for looking for a new rental property. The top three reasons cited were wanting a larger space, looking for a more affordable home, and exploring a new neighborhood scene.

But those reasons vary by age. Younger and older renters are more likely to prioritize affordability. That's because young renters often have lower starting salaries and student debt, and older renters have fixed retirement incomes. Middle-aged renters are mainly focused on more space as they start or grow their families.

"People are still moving here [Las Vegas] for opportunity, affordability, and lifestyle," says Little.

Renters are prioritizing affordability and are willing to give up other amenities, including on-site services and short commutes.

"Rents continue to soften in these markets. Specifically, median asking rents have declined year over year for 35 consecutive months in Las Vegas, 36 months in Atlanta, and 28 months in Austin," says Xu.

Paying the price

Affordability is the challenge, and the median asking August rent has seen a decline. The asking rent for a two-bedroom unit dropped 2.2% year over year. Nationally, two bedrooms are going for $1,897—that's $60 lower than the peak in August 2022.

The rent for a one-bedroom unit is also down to $1,593, compared to its peak in August 2022, when it was $67 higher, but the monthly amount is still $207 higher than in August 2019.

And, studios are going for $1,430, down by $51 from the peak in October 2022.

The exception is if you live in one of the major metropolitan cities, like Boston-Cambridge-Newton, where the median asking rent is $2,979; New York-Newark-Jersey City, NY-NJ ($2,946); or Los Angeles-Long Beach-Anaheim, CA ($2,818).

But renters are still optimistic about one day owning a home. Nearly 60% of people surveyed by Realtor.com reported plans to buy a home, and about 52% said they expect to do so within the next one to two years.

Age also plays a role, with 26% of renters aged 65 and older saying they plan to purchase a home, citing fixed incomes and the possibility of moving into a senior-friendly housing community without long-term commitments.