Asking Rents for New Apartments See Notable Increase in Q3 2024

The asking rents for new apartments surged in the third quarter of 2024, marking a significant 1.5% year-over-year rise. This increase brought the median rent to $1,802, representing the largest spike in 18 months. This shift signals a rebound in rental prices following consecutive quarters of decline, according to a Redfin analysis of data from the U.S. Census Bureau.

Regional Trends in Asking Rents for New Apartments

The changes in asking rents for new apartments varied widely across regions, with some experiencing declines while others saw substantial growth:

Northeast: Asking rents dropped by 3.6%, reaching a median of $2,300. This decline coincided with a 13% year-over-year increase in new apartment completions, the highest level since late 2022.
West: The West region saw the most significant increase, with asking rents rising 4.4% to $1,899. This growth came despite a remarkable 34.1% jump in new apartment completions.
Midwest: Median rents increased by 3.3% to $1,519. The Midwest also led the nation in new apartment completions, with a staggering 47% year-over-year increase.
South: The South, which completed almost as many new apartments as the other three regions combined, experienced a modest 1.1% rise in rents to $1,773.

National Trends and Market Dynamics

The median rent for newly constructed apartments surpassed $1,800 in the third quarter, rebounding from a low of $1,714 in the second quarter. This trend reflects a dynamic rental market where rising rents persist despite an influx of new apartments.

Senior Economist Sheharyar Bokhari from Redfin noted, “We would usually predict that rents will stay flat, or even potentially fall, when there are so many new apartment buildings opening up. What’s interesting in the third quarter is that rents are rising by more than the national average in the West and Midwest, even after the number of new apartments spiked between 30-50%. This is likely due to more new apartments being built in more expensive metros in each region, pushing the overall levels up.”

New Apartment Completions Hit 12-Year High

Apartment completions in the second quarter of 2024 reached the highest level in over 12 years, increasing by 22.6% year-over-year. Every region experienced growth in new completions, led by the Midwest and West with 47% and 34.1% increases, respectively. These figures highlight the robust pace of construction aimed at addressing housing demand.

Shifts in Rent by Apartment Size

The asking rents for new studio, one-bedroom, and two-bedroom apartments all rose in the third quarter:

Studio apartments saw the largest increase, with rents rising 3.4% to $1,597.
One-bedroom apartments, the most common type of new apartment, experienced a 1.6% increase to $1,666.
Two-bedroom apartments’ rents rose 0.9% to $1,961.

Conversely, rents for three-or-more-bedroom apartments fell by 5.1%, reaching $2,189—the lowest level in two years.

The asking rents for new apartments have demonstrated resilience, with a 1.5% rise in the third quarter of 2024 marking a significant recovery. While regional variations highlight distinct market dynamics, the overall increase in rents—despite a surge in new completions—reflects shifting trends in housing demand and supply. This data, sourced from Redfin’s analysis of U.S. Census Bureau figures, underscores the complexities of the rental market in the current economic landscape.