For Atlantans struggling to get into affordable housing, a new report published Tuesday finding the city’s rental market is softening could spell some relief.
There was a 3.7% decline in rents compared to the same time last year, in the cities of Atlanta, Sandy Springs and Roswell, and the area ranked fourth in 10 markets with the largest yearly rent price declines, according to a March rental report by real estate listings company Realtor.com. The median rent in March was $1,626.
“Rising shelter costs have been a major driver of overall inflation, a top concern for the [Federal Reserve] as it meets this week,” Danielle Hale, the listings site’s chief economist, said in a news release. “There is some good news for renters with prices falling in many parts of the country, especially outside expensive metro markets in the West and Northeast.”
The March rental report comes with provisos, noting that while rents in the United States declined for the eighth month in a row, the median rent nationwide of $1,722 was only $36 less than an August 2022 peak. That’s still $313 more than pre-pandemic prices in March 2019.
Moreover, wages have not kept pace with rising housing costs. And a Zillow report released earlier this month found that rents are still rising in metro Atlanta, though at a slower pace.
According to the Realtor.com report, rents in other parts of the country, including the Midwest, were flat. In the South, the median rent fell 1.5% compared to the same time last year, the report found. Hale said this was evidence that increasing the supply of available housing had curbed costs in the region.
“Unemployment is low and demand for rental housing was strong, but an influx of new units has helped push down rental prices,” said the report, which relied on rental data in March for studio, one-bedroom and two-bedroom units listed on Realtor.
Meanwhile, the report said rents had continued to grow in the West, including in San Diego and Los Angeles, and in the Northeast, including in New York City and Boston.
The good news for Atlantans was tempered by data finding almost half of renters are cost-burdened, or paying monthly rent more than 30% of their income.
A new Zillow report published on Monday said while rent increases in the U.S. have flattened in the past couple of years, “incomes haven’t yet caught up.”
“As a result, the share of take-home pay that a renter household needs to dedicate to their monthly rent remains higher compared to before the pandemic,” states the real estate marketplace company’s report.
Zillow said in 2022 there were about 19 million rent-burdened households in the United States. About half of those, or 9.4 million, were “severely rent-burdened” with more than half of their income going toward rent.
Orphe Divounguy, author of the report and a senior economist at Zillow, said that in contrast to Realtor.com’s findings, Zillow’s March rental market report showed rents are still rising in metro Atlanta, albeit more slowly.
He said the report shows rents are up about 1% year over year from March 2023 and added that rent in Atlanta was up 35% since March 2020, while hourly earnings in Atlanta rose 13% over the same period.
“If you combine higher rents with wages that are growing but lagging substantially, the share of income spent on rent has increased tremendously,” he said.
Zillow said that Black and indigenous people, as well as other people of color, were more likely to live in rent-burdened households than white people.
In Atlanta, about 29% of white households were rent-burdened compared to 36% of Black, indigenous, and other people of color.
The report suggests a lack of housing vouchers has worsened the challenges, with 19 million likely qualifying for vouchers but only 2.4 million available.
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