‘Tis the season for cheaper apartment rents

Like the for-sale housing market, the rental market has its seasonal ups and downs.

More renters tend to move in the spring and summer, and fewer move in the fall and winter. The rents that landlords ask new apartment tenants to pay tend to fluctuate with renter demand.

“If you’re looking to have a little more leverage on pricing, now is definitely the time of the year for that,” said Chris Salviati, senior housing economist at the rental search website Apartment List.

Renters searching for homes now are more likely to find prices that are a bit lower and perks such as a month or two of free rent or deals on parking.

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Last year and this year, typical asking rents in Philadelphia hit their lowest levels around January, according to Apartment List. Prices peaked in the summer.

Asking rents across the country tend to fall from September through December and sometimes January, and then they start to rise, according to Apartment List’s rent estimates from 2018 through November 2023. Rents often fall the most in November.

In Philadelphia, the median asking rent last month — $1,236 — was down just over 2% from peak prices in June and July, according to Apartment List. That means renters could have saved $27 per month or $324 per year paying the typical rent in November vs. in the peak months.

Asking rents this year didn’t rise as high and haven’t fallen as fast as last year. Rents fell by nearly 6% during the market’s last offseason.

So if renters are able to control the timing of their lease, they can save a few bucks. But because fewer renters move this time of year, fewer apartments are available for the ones who are searching.

“You might not find quite as many options, but if you do find something that works well for you, you can often find a little bit of a deal,” Salviati said.

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Philadelphia’s median asking rent fell 0.5% in November, a little less than the national drop of about 1%. But the city is holding onto its reputation as affordable compared to other big cities. Of the country’s 100 largest cities, 68 had typical rents last month that were more expensive than in Philadelphia.

The typical asking rent in the city last month was about 8% lower than in the country as a whole. The median rent was $1,115 for a one-bedroom apartment and $1,299 for two bedrooms.

“It has been a real roller-coaster over these last few years,” Salviati said.

Asking rents rose rapidly across the country from 2021 into 2022, but prices dipped a bit this year, he said. Still, “nothing that would be close to offsetting the price growth we saw in the preceding years.”

Consumers have not been feeling confident about the economy over the last few months, although that trend reversed recently. The lack of confidence has held people back from forming new households and helped slow demand for new rentals, Salviati said. If next year, public sentiment catches up with positive economic signs, demand might bounce back.

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At the same time, nationally, a near-record number of rental units are in the construction pipeline, and next year, the most new apartments are set to hit the market in decades, Salviati said. Philadelphia has had a burst of apartment development in recent years.

New supply explains why asking rents are down nationally compared to last year, and it should help keep asking rent growth in check. Salviati predicts around 2% growth nationally.