Property managers are offering concessions as rental market cools
- Over half of rental listings are offering concessions in many major metros
- More new multifamily units completed in June than in any month since the 1970s
- The rental vacancy rate held steady at 6.6% in the second quarter
Workers construct new homes in a development on Tuesday, June 25, 2024, in Loveland, Colo. On Thursday, July 11, 2024, Freddie Mac reports on this week’s average U.S. mortgage rates. (AP Photo/David Zalubowski)
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(NewsNation) — One-third of property managers are now offering concessions such as free parking or free weeks of rent as the rental market cools down.
New data from Zillow reveals that 33.2% of rental listings on the platform offered some form of concession in July, up slightly from 33% in June and 24.5% a year earlier.
Some major metropolitan areas have been even more renter-friendly, with over half of the rental listings offering a concession. The percentage of property managers offering concessions in cities like Raleigh, Charlotte, Atlanta, Salt Lake City, Nashville and Austin ranges from 50.5% to 53%, according to Zillow.
The post-pandemic construction boom is also softening rent growth. According to the Zillow data, more new multifamily units were completed in June than in any month since the 1970s.
“Builders have stepped up and built an incredible number of homes in response to soaring rents during the pandemic, and renters are now seeing the benefits,” said Zillow Chief Economist Skylar Olsen in a news release. “Now is a great time for renters to find a deal, with more new apartments hitting the market than at any time in the past several decades.”
There is still a large number of multifamily units under construction, but the number has fallen in each of the last eight months.
While multifamily rents are still rising, up 5.1% since July 2022, the pace is in line with historic norms and is a relief for renters after a 22.3% increase in the last two years. Monthly rent growth for multifamily units slowed in July for the second month in a row.
The rental vacancy rate held steady at 6.6% in the second quarter of this year, the same as it has been for the last four quarters, but it’s at its highest since winter 2021.
“Rents are still growing, but it’s a far cry from the steep rent hikes of two or three years ago, and renters will find sweeteners being offered by more than half of rentals in some places,” Olsen said in the release. “A slowing job market and lower mortgage rates could mean falling rents if the current trends hold.”
