Will Rent Prices Go Down in 2023?

In 2022, rental prices in America soared to unprecedented heights. Combined with the lowest vacancy rates that the country has experienced in nearly four decades, the market seemed virtually impenetrable for anyone on a modest budget.¹

The turn of the calendar brings new beginnings, however, and with them comes the hope that prices will level out (or, more optimistically, fall) in the new year.

Renters across America all have the same question on their minds: will rent go down in 2023? 

Unfortunately, unless your landlord is a canonized saint, there’s not much chance they’ll drop your rent in the coming months. Regardless, knowing what to expect can help renters weather the storm and better prepare themselves for a continually increasing cost of living. 

What Will Happen to Rent Prices in 2023?

The tail-end of 2022 did bring about some mildly positive news for renters. Across the nation, rental prices fell around $10 per month in America’s largest cities.²

Ten whole dollars, after 17 months of record-setting price increases and mass uncertainty.³ That’s a whopping 0.3% discount, given rents can average over $3,200 in the same areas.⁴

Unfortunately, even this minor decrease likely won’t sustain itself in the new year. A number of factors suggest rent prices will continue to ascend in 2023.

Inflation

Rental trends tend to spike during inflation. Inflation was an absolute killer for the average American’s pocketbook in 2022. In general, housing prices rose 8.3% around the country last year.⁵ However, as far as the housing market is concerned, those numbers are child’s play.

What is a normal rent increase? In the first half of 2022 alone, rental prices increased as much as 12.2%.⁶ And inflation can have a snowball effect, with the renters at the bottom often bearing the extra costs owners incur from upkeep, taxes, rising interest rates, mortgage payment, etc.

Unsurprisingly, inflation isn’t planning on going anywhere in 2023. While it may slow to as low as 4.6%, the future isn’t certain.⁷ Not to mention, surging rental prices tend to be a driving factor when it comes to increasing inflation.⁸

End of Rental Protections

Can you negotiate apartment rent? While normal tenancy rights are still valid, as of now, all 50 states have ended any enhanced protections they established during COVID.⁹

This means that landlords who’ve been holding out on evicting tenants can proceed uninhibited, and moving in new renters is a classic strategy for raising rent prices. A new lease presents landlords with the opportunity to increase prices past the legal limits placed on existing agreements.⁶

While there’s no predicting exactly how far potential evictions could increase rent in 2023, with the law on their side, owners certainly won’t be cutting prices.

The Post-COVID Return to Cities

COVID lockdowns instigated a mass exodus from major metropolitan areas and into the countryside. City-dwellers who anticipated a long time in isolation wanted to carry out their quarantine in the most spacious and lush settings possible. Interestingly, this one-time migration to rural areas was one of the driving factors in shooting rents to astronomical prices over the previous three years.⁷

The panic that defined the beginning of the pandemic has since subsided, and people are more comfortable being in close quarters. Former city-dwellers in cities like New York and Los Angeles are returning—but landlords are greeting them with massive price increases rather than open arms. 

The Big Apple is projected to have the highest rent in the entire nation in 2023.⁸ In the City of Angels, regulations cap the amount by which landlords can raise the rent, but they can still demand as much as 10% extra, or even more if the property isn’t within a rent-stabilized locale.⁹ 

The same soaring prices define most urban centers across the nation, with a renewed demand driving up the amount owners are asking for.⁴

Resist Rising Rent Prices with Coliving at Common

 The answer to “Will rent prices go down in 2023?” is, unfortunately, a resounding “No!” — so, how can renters best cope? With rental rates continually on the rise, many people are being priced out of the rental property they hope to call home and finding themselves giving up the amenities and space they desire to make ends meet.

Fortunately, when you move into a coliving space from Common, you never need to sacrifice comfort for value.

That’s because every single one of our coliving units comes with a private bedroom where you can zen out and have personal time, while our contemporary common areas offer state-of-the-art appliances and comfortable, modern furniture. 

The kicker? It all comes at a far lower price than conventional landlords and roommates offer. By renting through Common, our valued tenants can save hundreds, or even thousands of dollars every month versus renting through traditional agencies and personal sites.

At Common, we’re revolutionizing the way people live across America, whether that’s in San Francisco, New York, Los Angeles, Chicago, etc. Book a tour of one of our many buildings in a city near you and find the home—and rental price—you’ve been searching for.  

Sources: 

1. Harvard University. America’s Rental Housing 2022. https://www.jchs.harvard.edu/
2. Consumer News and Business Channel. How much higher rent will go in 2023, according to experts. https://www.cnbc.com/
3. Cable News Network. US rents hit a record high for the 17th month in a row. https://www.cnn.com/
4. Yahoo. Price-to-Rent Ratio in the 50 Largest U.S. Cities. https://finance.yahoo.com/
5. Statista. Inflation in the U.S. – statistics & facts. https://www.statista.com/
6. U.S. Bureau of Labor Statistics. Housing Leases in the U.S. Rental Market. https://www.bls.gov/
7. Forbes. What’s Ahead For Housing In 2023: Time For Government To Invest In Housing. https://www.forbes.com/
8. Consumer News and Business Channel.  U.S. cities expected to have highest rent prices in 2023. https://www.cnbc.com/
9. Los Angeles County Consumer and Business Affairs. Rent Increases. https://dcba.lacounty.gov/
10. United States Congressional Budget Office. CBO’s Current View of the Economy in 2023 and 2024 and the Budgetary Implications. https://www.cbo.gov
11. USA Today. Soaring rents are bad for inflation, signal more rate hikes ahead. https://www.usatoday.com/
12. Nolo. Emergency Bans on Evictions By State.  https://www.nolo.com/