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Spring 2024: Rents continue to rise

Spring 2024 - Rents continue to rise
by Brad Cartier, posted in Newsletter

As expected, the Federal Reserve held rates steady at its meeting last week, according to Jeff Cox of CNBC. After its two-day policy meeting, the Fed announced it would maintain its benchmark overnight borrowing rate of 5.25% to 5.5%. Additionally, Fed officials predicted three quarter-percentage point cuts by the end of 2024, which would be the first reductions since the early days of the Covid pandemic in March 2020.

Fed holds rates steady

Source: CNBC (March 2024)

Cox quotes Fed Chairman Jerome Powell:

“We believe that our policy rate is likely at its peak for this type of cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year…We are prepared to maintain the current target range for the federal funds rate for longer if appropriate.”

The Mortgage Bankers Association’s (MBA) Chief Economist Mike Fratantoni comments on the rate decision:

“The FOMC held rates unchanged at its March meeting and continued to signal its next move will be a rate cut.  The only question is when. Their new projections indicate three cuts for 2024, unchanged from their December projections for 2024, but with one less rate cut expected in 2025. We are forecasting that the first rate cut will be in June, and a total of three rate cuts this year. The committee did not indicate any changes to the pace of quantitative tightening. We continue to expect longer-term rates, including mortgage rates, to decline gradually over the course of this year.”

John Veit of JPMorgan Chase comments on the rate decision, highlighting that any rate cut decision would be based on current labor market conditions. Powell also highlighted the need for more data to confirm that inflation has reached the target of 2%. This aligns with JPMorgan’s prediction that the Fed will cut interest rates three times this year.

Indeed, Megan Leonhardt of Barron’s reports that Powell is not seeing the cracks in the economy that he’d hope for to justify more immediate rate cuts. Powell believes the broader workforce trends look good, and the labor market is strong despite concerns about the low hiring rate. Powell acknowledged that some economists have expressed worries that increased layoffs could lead to a quick rise in unemployment. Nonetheless, Powell does not currently see any cracks in the labor market.


According to a new analysis from Zillow, rental concessions appear to be leveling off. In February, 32.2% of Zillow’s rental listings offered concessions, a slight decrease from December but up 5.6% annually. This marks the slowest annual growth rate since June. After seven months of consecutive increases, the share of rentals offering concessions fell to 31.9% in January and slightly increased in February.’s monthly rental report shows that US rents rose 2.5% year over year in February, the highest increase in over a year, to an average of $1,981. Rents also increased by $17 month over month.

Rents rise

Source: (March 2024)

“Narrowing in regionally, the Northeast and Midwest continued to be at the vanguard of rental gains. Year-over-year, rents in the Northeast rose from $2,357 to $2,481, or 5.3 percent – the largest regional increase in the study. The Northeast remains the most expensive region in the nation, with current rents standing at their highest since August of 2023. Rents also climbed once again in the Midwest, topping last month’s record. At $1,441, rents here are up 4.9 percent on a yearly basis. Despite the region’s steady gains, the Midwest still offers renters the most affordable prices in the nation, currently $1,440 cheaper than its Northeast counterpart, and $907 cheaper than rents in the West.”

According to Zumper’s March rent report, national rates and rents in 67 cities increased for the first time in 6 months in March, marking the end of the slow-moving season. One-bedroom rent increased 0.3% to $1,487, while two-bedroom rent grew 0.5% to $1,847. The market has returned to a more standard pattern where demand cools in the winter, picks up again in the spring, and peaks in the summer and fall.

Rents rise

Source: Zumper (March 2024)

Finally, a new report from Marcus & Millichap on multifamily rents shows that in 2024, national monthly apartment rents have increased by $6, reversing the trend of mild rent cuts in the latter half of 2023. Vacancy rate is steady at 5.9%. San Francisco Bay Area, Chicago, Seattle-Tacoma, and Washington, D.C. are showing the most rent growth momentum, and Nashville is noteworthy as pricing is increasing despite high delivery volumes.

Biden on housing

Jeff Mason of Reuters reports on President Joe Biden’s recent comments on housing, noting that his proposed housing plan would require congressional approval, which might be difficult to achieve in an election year. The plan intends to give first-time homebuyers a $10,000 mortgage relief tax credit. Additionally, a $10,000 tax credit for those selling “starter” homes will free up housing inventory at the lower end of the market.

Adam Cancryn of Politico notes that Biden is prioritizing housing on the campaign trail. The President has recently praised the NAR commission settlement, noting that it will help boost competition and lower costs for homebuyers. 

Brooklee Han of HousingWire reports on Biden’s statements on the NAR settlement, reporting that the Realtor organization responded to what they believe were misleading claims by the President:

“While the National Association of Realtors appreciates President Biden’s continued focus on the affordable housing crisis, the President unfortunately repeated incorrect claims that the recently announced settlement agreement allows Americans to negotiate commissions for the first time. Commissions were already negotiable before this resolution was reached and will continue to be negotiable as they have been. Real estate agent commissions are driven by the market and are not the cause of the affordability crisis.”

Zachary Halaschak of the Washington Examiner reports that the Biden administration is advocating for federal pressure to ease zoning restrictions at the local level to address the nation’s housing affordability crisis. This was highlighted in their annual Economic Report of the President, which specifically focused on increasing housing supply.

Jim Tankersley and Conor Dougherty of the New York Times report on the topic of easing zoning restrictions, noting that:

“The policy proposals in a White House report being released on Thursday include what could be an aggressive federal intervention in local politics, which often dictates where homes are built and who can occupy them. The administration is backing a plan to pressure cities and other localities to relax zoning restrictions that in many cases hinder affordable housing construction. That recommendation is part of a new administration deep dive into a housing crisis, decades in the making, that is hindering the president’s chances for a second term.”

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