The nation’s capital saw the return of slight annual rent growth in June, after 13 months of consecutive price cuts. Effective asking rents inched up a mild 0.1% year-over-year as of June. While modest, this was the first time price increases returned to Washington, DC after rent cuts have been the norm for this market for since May 2020. Even with this recent milestone, however, this market still has a long way to go to catch up with the U.S. overall, where rents grew by an average of 6.3% year-over-year as of June. It’s not uncommon for rent positioning in Washington, DC to fall behind the U.S. norm. Holding back price growth in Washington, DC – especially in the luxury stock – has been significant competition from new apartment supply, which has grown the local inventory by more than 20% over the course of the past 10 years. But back in the last few months of 2019, and the first month of 2020, the pricing divide seemed to be closing, when operators in Washington, DC were pushing rents right in line with the national average. Then the COVID-19 pandemic hit, deeply damaging apartment fundamentals in gateway cities, and rent cuts became the norm for Washington, DC.
