Good news, renters: Nevada leads nation in rental rate declines
Nevada led the nation in May for the biggest decline in rental rates year over year, according to a new study from Rent. Research which is owned and operated by Redfin, an online real estate brokerage that tracks national data.
Rents hit their lowest point in 2023 in May, dropping 7.4 percent from the same month last year for an average of $1,535, including single-family rentals and multifamily, part of a trend of monthly drops dating all the way back to January. The high water mark for rental rates in Nevada appears to have been August of last year, as rates have dropped consistently since then for a total of 8.5 percent. Looking even further back, though, rents in the state are still up 18.8 percent since 2020.
Jon Leckie, a researcher for Rent. Research who worked on the report, said the Las Vegas Valley is part of a regional wave that appears to be leading the way when it comes to rental rate declines.
“Both Las Vegas and Nevada are part of a larger trend in the Mountain West, including Idaho, Arizona, and to a lesser extent Utah, where rents are falling faster than in the rest of the nation,” he said.
The U.S. housing market has been on a roller coaster ride since the start of the COVID-19 pandemic, which saw a buyer’s boom fueled by cheap money that subsequently sent prices to record highs in 2021.
Then, in the second half of last year, Southern Nevada’s housing market came crashing down to earth as rising interest rates — introduced to quell rising inflation — led to a sharp jump in mortgage rates. This, in turn, forced buyers to pull back and sellers to slash prices.
Now, some renters in Las Vegas are finding themselves in a somewhat advantageous position, with some properties offering rental concessions to lure new tenants, as construction has slowed on new multifamily developments because of higher interest rates.
The southeastern part of the valley — Las Vegas, Henderson and Paradise — is recording the highest rental rates, as renters in those areas paid an average of $1,639 in May, which is actually a 10.5 percent drop from the same month last year.
May marked an interesting point in the national rental market, according to the report, as after two years of continual rent growth, the national average dropped 0.57 percent. That’s the first time prices went into the negative since March 2020.
This is part of a national decelerating process that started back in September of last year, after nearly a year of double-digit growth from October 2021 to August 2022.
Median rent in the U.S. currently sits at $1,995, down from a high water mark of $2,053 in August 2022.
According to the Rent. Research study, “broad trends across the rental industry, including new inventory and demand below seasonal norms, have driven price slowdowns in recent months and could continue to temper growth going forward.”
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.