Apartment Operators Cut Rents for the First Time in a Decade

For the first time in nearly 10 years, the nation’s effective asking rental rates are dropping.

On average, the price operators ask new renters to pay came down 1.0% in 2nd quarter 2020, leaving rents 0.2% below the year-ago level.

This was quite a change from the strong rent growth seen from 2017 to early 2020 when asking rent growth increased at an average annual rate of 2.9%. In the six years before that, from 2011 through 2016, annual effective asking rent growth averaged 4.1%.

Change in effective asking rents by product segment did not show a lot of variation in the year-ending 2nd quarter. Class A rents saw the deepest cuts of 0.7%. Class B units logged a 0.3% decline. Class C units managed to retain minimal growth, with effective asking rents growing by 0.8%.

Traditionally slow-and-steady performing markets like Memphis, Cincinnati, Greensboro/Winston-Salem and Virginia Beach were big players on the market-level leader board for asking rent growth in 2nd quarter. Meanwhile, in previously red-hot Phoenix, performance has cooled considerably from pre-pandemic highs, though the market still claims the #3 spot for rent change nationally.