In the fourth quarter of 2022, the average asking rent in the Nashville metro area was $1,550, up 9.9% from a year earlier, according to economic research firm Moody’s Analytics.
Why is this important: Affordability issues are beginning to weigh on the booming rental market.
What is happening: A lot future buyers chose to rent longer last year, supporting demand for apartments, according to economists at Moody’s Analytics. But people are reaching their spending limit.
- For the first time in more than two decades, households must now devote 30% of their income to average rents, a new report shares.
Year-on-year rent growth slowed in the second half of the year across the board, “and we expect further deceleration as new supply hits the market at the same time as the labor market is softening,” senior economist Lu Chen told Axios.
Zoom out: Rents are already falling in cities near the epicenter of the pandemic’s spike in house prices, Axios’ Matt Phillips reports, citing data from Realtor.com.
What we are looking at: New apartment construction. The expected increase in supply could help to lower prices.
- Yes, but: Experts say most cities “will remain undersupplied with the type of affordable units who see the greatest demand,” according to the Wall Street Journal.