The median asking apartment rent has dropped at record-breaking rates year-over-year in some of the most populous metro areas in Florida and Texas.
Asking rents in the United States rose by 0.7% year-over-year to $1,654 in June, marking the biggest gain in more than a year. It is also the highest median price recorded since October 2022.
In contrast, asking rent prices in four populous metro areas in Florida saw record-breaking declines. Specifically, asking rents in Jacksonville fell 12.4%, Tampa's declined by 6%, Orlando's fell by 4.8%, and Miami's declined by 3.8%. The decline in Jacksonville was the biggest drop recorded since 2019, while the decline in Tampa is the largest on record, according to a recent Redfin analysis.
Rent prices also fell a record 12.6% in Austin, Texas. That is the largest decline among all 33 metro areas Redfin analyzed.
Why Are Rent Prices Dropping
During the COVID-19 pandemic, builders ramped up construction to meet an overload of demand during the buying and moving frenzy. But now, many homes are sitting vacant, leading property owners to lower prices in hopes of attracting tenants.
In Florida, specifically, property owners are also grappling with rising insurance costs due to the increasing risk of climate change. On average, Florida homeowners spend about $6,000 yearly on insurance premiums---triple the national average, per Wall Street Journal.
"It's a good time to hunt for bargains if you're a renter in Florida or Austin," Redfin Senior Economist Sheharyar Bokhari said in Redfin's report.
"With so much supply on the market, renters may be able to get concessions like free parking or discounted rent. But renters in Florida should be aware that landlords are grappling with surging home insurance costs, and they may ultimately ask tenants to foot the bill via higher rents," the statement continued.
Apart from higher insurance costs and a surplus of inventory, Redfin also noted that rents in Florida and Tampa could be falling after they "overheated" during the COVID-19 pandemic. At the time, asking rents in Tampa, for instance, rose as much as 37.8% year-over-year.
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