Surge in Multifamily Housing Drives National Rent Discounts

The index, a collaborative monthly report from researchers at the University of Alabama, Florida Gulf Coast University, and the University of Mississippi, reveals that 64 of the largest 100 U.S. rental markets are now trading at a discount. See your city’s current ranking and other relevant information concerning your rental market at Waller, Weeks and Johnson Rental Index.

 Impact of Multifamily Supply

Experts attribute this cooling trend to a significant surge of new multifamily inventory. "After several years of significant premiums, rents around the country are beginning to come back to their historical trends," noted Ken Johnson, Ph.D., of the University of Mississippi. "This appears to be mostly driven by the significant development and completion of multifamily units around the country".

Deepest Discounts and Home Price Stability

Florida and Texas dominate the list of deepest discounts, led by Cape Coral, FL (-11.21%) and Austin, TX (-11.11%).

Shelton Weeks, Ph.D., of Florida Gulf Coast University, highlighted the local implications for Southwest Florida. "The magnitude of the discounts in Cape Coral is significant," Weeks stated. He added that these rental discounts should eventually "help tame home prices in the area," creating more affordable homeownership opportunities in the region over time.

The Affordability Gap

Despite these discounts relative to historical trends, researchers warn that actual affordability remains a hurdle for many Americans.

"While the pace of rent growth is slowing and we see more discounts, housing affordability remains a major concern," said Bennie D. Waller, Ph.D., of the University of Alabama. He emphasized that even with discounts, average rents often still exceed what many households can comfortably afford without being rent-burdened. 

Currently, of the largest 100 U.S. housing markets, the ten most deeply discounted in terms of rent are -- Cape Coral, FL: -11.21%; Austin, TX: -11.11%; Phoenix, AZ: -9.67%; North Port, FL: -8.08%; Salt Lake City, UT: -7.96%; Colorado Springs, CO: -7.64%; Denver, CO: -7.44%; Las Vegas, NV: -7.36%; San Antonio, TX: -7.33%; and Boise City, ID: -6.54%.

The Waller, Weeks and Johnson Rental Index acts as a monthly health check for the U.S. rental market by comparing current rates to historical trends dating back to January 2000. It identifies which of the top 100 metropolitan areas are leasing at a premium or a discount relative to their long-term, statistical trends.