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Rent prices expected to drop slightly in 2024

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Posted at 1:59 PM, Dec 13, 2023
and last updated 2023-12-13 16:05:16-05

Data from Realtor.com shows rent prices are expected to drop in 2024 by 0.2%.

"People who are on the fence and trying to decide between renting and buying, we expect to see more multifamily units get through the construction process and finish and hit the market in 2024. So that's going to keep rents a little bit lower than we might otherwise expect," said Danielle Hale, Chief Economist at Realtor.com.

"It's just a little bit of a minor discount. But if you look at the rent versus buy trade-off, we did a study back in August looking across the major markets. And we found that in all but three of the 50 largest markets, if you look at the monthly costs, renting is the cheaper alternative for the starter home range. So we're talking zero to two-bedroom homes. And with rents dipping, that's likely to continue in 2024. But this is just looking at the monthly cost situation. If you think over the long term, If you're going to be in a home long enough, even if rents are roughly stable, like we expect them to be, it can make sense to buy."

In its 2024 housing forecast, the online platform also shared mortgage rates are expected to average around 6.8% for the calendar year.

"So, no matter whether they end up choosing to rent or choosing to buy, they're likely to see a little bit of savings relative to what we saw in the market in 2023."