According to a recent report by Redfin, the rental market in the U.S. has experienced an annual decline for the first time since the pandemic began. The median asking rent price has fallen by 0.4% year-over-year, reaching $1,937, the lowest it has been in 13 months. The decline is due to a surplus of rental availability, which has caused the rental market to "cool" after rents "ballooned" during the pandemic. The decline in median rent prices is complemented by a decline in median home-sale prices, which have also decreased.

Redfin's report indicates that rent prices have fallen the most in Austin, Texas, with an 11% decrease, followed by Chicago, Illinois, with a 9.2% decrease, and New Orleans, Louisiana, with a 3% decrease. However, some cities have experienced rent increases, including Raleigh, Cleveland, Charlotte, Indianapolis, and Nashville.

The rental market is cooling because of unemployment, inflation, and fears of a recession. Inflation has fallen for a ninth-straight month, and the unemployment rate is still high. Some landlords have been prompted to cut rent or offer concessions, like discounted parking, to attract prospective renters. Harvard University's Joint Center for Housing Studies reports that vacancy rates are nearing a 20-year average after hitting a historic low during the pandemic.

Furthermore, the Federal Reserve Economic Data reports that more than 509,000 privately owned housing projects were completed in February, the most since 1987. The Federal Reserve's report earlier this week suggested that rent was "by far the largest contributor" to inflation, despite a decline in energy prices, which decreased by 3.5% in March.