Renters Offered More Concessions as Market Stabilizes
Renters are getting sweeter deals across the U.S. this spring, with far more Zillow rental listings featuring some sort of concession compared to last year.
Now 27% of rentals on Zillow offer at least one concession – such as free months of rent or parking – to attract new tenants, compared to 21% at this time last year. They’re one way to entice new tenants to a property without lowering rent.
It’s another sign of the rental market returning to long-term norms, following a sluggish period in the wake of the pandemic outbreak and a frenzy of growth that followed, when housing costs skyrocketed for both buyers and renters.
Zillow’s rental market report shows 5.3% year-over-year growth in April, much closer to normal 3-5% annual growth than the peak of 16.9% in February 2022.
Where are apartment hunters getting the most sweeteners
Rental concessions are more common than a year ago in 46 of the 50 biggest U.S. metro areas. Metros where concessions are most prevalent are Washington, D.C. (48%), San Jose (46%), Salt Lake City (44%), Nashville (44%) and Seattle (42%).
Those with the lowest concentrations are New Orleans (6.8%), Milwaukee (9.8%), Miami (11.9%) and Oklahoma City (12.1%).
Some markets are generally more or less competitive than others, and always have more or fewer concession offers. Looking at trends over time can tell which markets have gotten more or less competitive. Markets where concessions have risen the most since last year — meaning the market is now friendlier for renters — are Salt Lake City, where the share of listings featuring a concessions rose 28 percentage points, followed by Dallas (+17 percentage points), Nashville (+17), Charlotte (+17) and Las Vegas (+15).
Market returning to long-term norms
Rent growth and concessions offered today are indicative of a much stronger rental market than that of early 2021, when the market was recovering from the pandemic. Business and college closures pushed workers and students from cities and campuses – many of whom moved back in with family.
Concessions featured on 33% of listings in April 2021 and annual rent growth was 3.2%, then pulling out of a year-long trough.
The nationwide rental vacancy rate climbed in the latest reading from the U.S. Census Bureau, and is now near where it was in the first quarter of 2020 when the pandemic hit. A higher vacancy rate means more options for renters in the market for a new place, and more reason for landlords to offer concessions to entice renters to look at their listing.
