January rents continue to show year-over-year declines

For the 18^th straight month, median asking rents across the largest 50 U.S. metropolitan areas fell on a year-over-year basis, according to Realtor.com’s monthly rental report.

The report found that the median asking rent was up $8 from December to $1,703. The rate of year-over-year declines moderated but rents were still down 0.2% when compared to January 2024.

“Rent growth has tapered off since its post-pandemic surge, but the declines have been minor,” according to the report. While January’s overall rent is lower than both January 2024 and January 2023, it still exceeds 2020 by $257, an increase of 16.1%.

The median rent for a studio apartment was flat for the year at $1,423, but up 11.4% during the past five years. The median rent for a one-bedroom apartment was $1,585, down 0.1% for the year, but up 16% since 2020. A two-bedroom apartment was renting for $1,887, down 0.2% from one year ago. However, renters were still paying 20% than they were pre-pandemic.

The report also found that renting a median-priced apartment remains more affordable than buying a median-priced home in all major U.S. metropolitan areas, except Detroit and Pittsburgh. One year ago, Realtor.com found that there were six U.S. metro markets where buying was less expensive than renting.

According to Realtor.com, Pittsburgh and Detroit were the two cities with the lowest median home listing prices of the top 50 metros. Pittsburgh’s median home price was $229,700, while Detroit’s was $239,950.

The median rent for a two-bedroom apartment in Detroit was $1,313, up 1.3% year over year. The median rent for an apartment in Pittsburgh was $,431. Realtor.com estimated that 21.7% of a Detroit renter’s median monthly income is required to pay for the apartment, whereas only 20.7% of the income was needed to make house payments. In Pittsburgh, 23.5% of the median income is needed to rent, while 19.7% of a median income is needed to make house payments.

In comparison, Los Angeles was the most expensive metro area on Realtor.com’s list for buying a home. The report estimated it cost 74.7% of the median income to make monthly payments on the average home. Second on the list was San Diego, where homebuyers spend 57.7% of their monthly income, and third was San Jose, where monthly payments would require 50.7% of a buyer’s median income.

Renting in LA is also expensive, but a bargain in comparison. The average rent was $2,736, which is down 2.6% from a year ago, but still would amount to 35.9% of the renter’s median income.

“For most Americans owning a home is still a big part of the American Dream, yet the lower monthly costs of renting in all but two of the 50 largest markets are a key consideration,” said Danielle Hale, chief economist at Realtor.com in a statement. “This relative cost advantage is one of the reasons we expect an increase in renter households and declines in the homeownership rate in 2025.”