Finally, some good news for renters: Housing rental market concessions are at their highest level in over a decade, as lower demand and higher supply drive landlords to compete for prospective tenants by offering all sorts of incentives and freebies.
Let’s take a look at the numbers. In January, 16.6% of stabilized apartments in the U.S. were offering some type of concession, one point higher than the previous month, and the highest since over a decade ago in 2014, according to RealPage Market Analytics as reported by CNBC.
What is a rent concession?
Rent concessions are generally one-time incentives, freebies, or perks, such as free rent for a few months, free parking, or waiving a security deposit. They are a way to attract tenants by reducing the short-term cost of housing when signing a lease, but not actually lowering the rent price, according to Redfin.
Landlords tend to offer these types of perks when demand for rentals is low, flat, or even falling, as it is in some regions now, the real estate brokerage platform said.
In January, the average concession added up to five weeks of free rent, per CNBC. Gift cards are also popular.
U.S. median rent hits four-year low
At the same time that concessions are up, rents hit a four-year low, with national median rents at $1,667 in February, down 1.7% compared to a year ago. That’s the lowest level recorded since March 2022, according to Realtor.com’s February Rental Report, which was published on Tuesday.
However, the median rent still remain high in a few key markets, such as: California ($2,895), Hawaii ($2,869), Massachusetts ($2,595), and New York ($2,592).
“The persistent softness we’re seeing is increasingly translating into real savings for renters who, for a long time, felt the market was out of reach,” chief economist at Realtor.com Danielle Hale said.