According to Realtor.com’s report on Wednesday, the rental market is currently experiencing a divide among different regions. While many areas of the country have seen a decrease in rent prices, eight out of ten Midwestern markets included in the September 50-metro report saw an increase in year-over-year rents. Cincinnati led this growth with a 3.4% annual increase.
On the other hand, eight out of ten Southern markets had some of the steepest declines in rent prices last month due to an influx of new multifamily housing developments. Nashville experienced the largest drop at 4.8%.
Realtor.com’s chief economist Danielle Hale explains that regional differences are largely influenced by supply and demand for housing options. In Southern markets where there has been an increase in multifamily inventory, renters have more options and competition has decreased leading to lower prices for rentals.
In contrast, Midwest markets continue to see higher demand than available supply which results in rising rents overall. Nationally, this balance between supply and demand should lead to slower increases or even decreases in shelter inflation over time as it has been one major factor driving up price increases recently.
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