If you want to save money on apartment rent, you may be in luck this year. Apartment rental prices have dropped in every major metropolitan area in the United States over the last seven months, after surging for much of the past two years according to data from Apartment List. In fact, August 2022 to January 2023 showed the first consistent six-month rent price decline in the past six years, the data shows.
Currently, rents nationwide are down almost 5% from November 2022, according to a report from Rent.com. January 2023 marked the fifth consecutive month of year-over-year single digit increases and the lowest yearly increase since June 2021.
As inflation continues and interest rates keep climbing, an opportunity to save money on rent may be welcome news. Keep reading to learn why rent prices have been dropping and how you can take advantage of lower rent payments.
Why Are Rents Declining?
You’ve probably noticed new apartments under construction in your area, as the largest batch of new rental housing in almost 40 years is currently hitting markets across the country. As the supply of rental units increases, all that new inventory is driving prices down.
Also, after two years of surging rental rates, many renters have hit their ceiling of what they can afford in housing prices. To keep new tenants coming in the doors, apartment rental companies are finding it necessary to lower their rates.
How to Secure a Lower Rent Price
Although the market rate is trending lower, most landlords will probably not automatically lower the rent for existing tenants. If you want to benefit from lower rents, you’ll likely have to be proactive. Consider four actions you can take to pay less rent in the coming year.
Renegotiate your current lease. If you like where you live and want to stay put, try to renegotiate your current lease. For example, if you signed a lease agreement in mid- to late 2022, you probably paid a premium rate. Before the time comes for your lease to renew, schedule a time to talk with your landlord or apartment manager.
Before speaking with your landlord, do some research about current rental rates in your area. If you’re paying more than the current going rate for new tenants, share that information and ask the landlord to drop your rent price to a more competitive rate. Consider offering to sign a lease with a longer term to get a lower rental rate.
Move to a new apartment. Some landlords may not agree to lower current rents. If that’s your case, and you can get a lower rate elsewhere, it may be time to move. With so many new apartments under construction and opening recently, many rental companies are offering lower rates and move-in specials to attract new tenants. The incentives may include discounts on your first month’s rent or waived application fees. Shop around and see if the potential savings on rent are worth making a move.
If you’re open to moving, also look for rental properties in less popular areas. Rental prices can vary widely depending on the location. An apartment in a less convenient or newly developing area may be less expensive than one that’s close to everything.
Consider a roommate. Splitting the rent and other bills with a roommate can significantly lower your monthly payments. Just make sure you choose someone you trust and who will be able to pay their share of the rent reliably.
Try short-term rentals. Don’t need a long-term lease, or open to moving from time to time? Consider a short-term or seasonal rental. Some landlords will offer lower rents on a seasonal basis, such as renting in a beach or lake area during the winter months. If you work remotely or have an interest in trying new places periodically, you may be able to secure lower rent with a short-term living situation.
Understand your credit and how it may affect your rent price. Most landlords complete a credit check before renting to a tenant. They use credit scores to determine whether they can expect a potential tenant to pay rent reliably and on time. Some landlords also request a rental history report from the credit bureaus, which shows things like evictions, broken leases and bad checks.
In addition to using a credit check to approve or deny a tenant, landlords may also use credit information to determine deposit amounts and whether to consider renegotiating a current tenant’s lease. If you’re hoping to sign a new lease for lower rent or renegotiate a current lease, it’s a good idea to monitor your own credit and check for errors before the landlord reviews your credit information.
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