Say goodbye to the gift cards, discounts and free amenities from landlords. With rental demand heating up as home buying cools, rent prices are rising and freebies are vanishing.
Listings on Zillow’s rental website HotPads that mention at least one concession are down close to 30% from the same time last year. Just one in 100 rental listings currently show any kind of move-in special.
In addition, after growth slowed last year, rent price gains are accelerating again, up 3.1% from a year ago to a median rent of $1,530 nationally, according to HotPads. That is the highest level since August 2017.
“This potentially signals more rent growth is to come, as landlords not only reduce incentives to move but also increase prices,” said HotPads Economist Joshua Clark. “Of course, all real estate is local and deals are becoming more common in some places.”
Rent prices are gaining steam in 36 of the nation’s 50 largest metropolitan housing markets. Austin showed the highest gains, followed by Phoenix, AZ and San Jose, CA.
But some rental markets are offering more perks than a year ago, for a variety of reasons. Concessions have more than tripled in Orlando and more than doubled in Atlanta, Boston and San Jose.
Orlando’s rental market is cooling because home buyers, especially millennials, are rushing in to take advantage of its relatively affordable prices. Boston has had a low share of concessions overall, about half the national average, so small gains skew the numbers. Atlanta’s rental market is very hot, but it is seeing a lot of new construction, so supply is still outpacing strong demand, forcing landlords to up the ante.
Renters are also still likely to see concessions on the higher end, where supply is more plentiful nationally. Construction of multifamily apartments surged over the past 5 years, but largely in the luxury sector. Developers have had trouble building more affordable housing because of higher costs for land, labor and materials.