The median asking rent in Atlanta has dipped for the first time since before the pandemic, according to a report by the real estate brokerage firm Redfin.
With many new apartments coming on the market, plus increased uncertainty about the direction of the economy and a greater share of millennials moving from renting to buying homes, the median rent of new leases in metro Atlanta dipped to $2,055 in March, down 2.3% from a year ago.
“Rents surged during the past two years because incomes increased and household formation rose as more millennials started families,” said Redfin in a statement.
A year ago, rents in Atlanta were rising at a double-digit pace, but circumstances have been changing.
“It’s simple economics,” said Oleg Konstantinovsky, director of sales and marketing for Promove, an Atlanta-based real estate agency with a focus on rental housing. “When occupancy goes down, prices have to fall.”
The overall occupancy rate is now 90.3%, down 3.8 percentage points in the past year, he said.
The market is actually weaker than the rent makes it seem because many landlords are offering concessions — often a month or two of free rent — in order to lure tenants, Konstantinovsky said. “The most concessions are in places like Midtown and Buckhead, where there is a lot of existing development and extra units coming on the market.”
Demand is also shifting as the two largest cohorts in the population slowly leave the ranks of renters. The number of boomer renters has dropped 20% in Atlanta, while millennial renters are down 31%, according to Rent Café.
The boomers increasingly have retired and downsized, while millennials have been taking on homeownership: More than half of millennials are now homeowners, said Rent Café.
Atlanta was one of 13 metros with declines, according to Redfin. Nationally, the median rent was $1,937 in March, down 0.4% from a year earlier.
Atlanta ranks 24th-highest for rents, far below New York, where the median is $4,022.
A typical renter in Atlanta pays 39% of his or her income in rent — somewhat higher than what financial advisers say is healthy — but in New York, rent accounts for 57% of the median renter’s income.
But affordability is about income as well as rent. Among the 23 metros with higher rents than Atlanta’s, nine are more affordable based on the ratio of their incomes to rent.
Higher rent can be offset by higher income.
The median rent in metro Austin is $2,104 — slightly higher than Atlanta’s — but the region’s typical income is $71,372 so on average, rent accounts for 35% of pay.
More extreme is San Jose, which has one of the highest median rents in the nation, but also some of the highest salaries. The median income in the area is more than twice as high as that of Atlanta’s, so rents take 32% of typical pay.
Rents for single-family homes have continued to rise, although at a somewhat more modest pace than the past several years, according to a study by CoreLogic, which collects and analyzes housing data.
Nationally, the rental price for a single-family home is up 5% from a year ago, while in metro Atlanta, those rents are up 6.4%. A year ago, rents were rising at a double-digit clip both in Atlanta and nationally, said CoreLogic.
Metros with highest median rent
1. New York: $4,022
2. Boston: $3,839
3. San Francisco: $3,716
4. San Jose: $3,609
5. Los Angeles: $3,412
6. San Diego: $3,410
7. Miami: $3,074
8. Seattle: $2,861
9. Riverside, CA: $2,801
10. Denver: $2,797
...
24. Atlanta: $2,055
Rent as share of income
1. Riverside: 67%
2. New York: 57%
3. San Diego: 56%
4. Los Angeles: 54%
5. Miami: 50%
6. Boston: 50%
7. Orlando: 48%
8. Sacramento: 48%
9. Tampa: 46%
10. Providence: 44%
…
15. Atlanta: 39%
Largest rent decline, year over year
1. Austin: -11%
2. Chicago: -9.2%
3. New Orleans: -3%
4. Birmingham: -2.9%
5. Cincinnati: -2.9%
…
8. Atlanta: -2.3%
Largest rent increases, year over year
1. Raleigh: 16.6%
2. Cleveland: 15.3%
3. Charlotte: 13%
4. Indianapolis: 10.5%
5. Nashville: 9.6%
Sources: Redfin, Rent Café, Bureau of Economic Analysis, staff research
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