Rent prices appear to be cooling off in some parts of the country, including Atlanta.
Rents in Georgia’s most populous city fell 2% month-over-month from May to June and about 3% since this time last year, according to data from Zillow.
Emory University Professor Dr. Rohan Ganduri said new construction might be causing the downturn.
“Prices in some ways signal to developers that there is a lot strong demand for housing, which then leads them to supply more and then construct more,” he said. “And I believe some of those apartments are some of the supply of some of these apartments. And housing seems to have increased, which has, you know, put somewhat of a downward pressure on rents.”
Rents are still climbing in some U.S. cities, but the rates are much slower than last year.
“In some places it has sort of flattened out or just gotten slightly negative,” Ganduri said. “But I believe the overall numbers seem to suggest that across the U.S., in the major metro cities at least, rents have gone up by about 2% or so on a year on year basis, which is which is far less than the double digit growth that we’ve been witnessing in the prior year
While rental prices have cooled off, Ganduri said it is difficult to pinpoint the exact reason why. He also said that there may have been a lower demand for rental units in the past few years because of the high price.
“At the same time, at the same time as interest rates are going up … it’s also having an impact on consumer demand, which means there are fewer people who are now willing to move out of their parent’s home or the basement and are and then have an apartment for themselves, or there are more friends living together instead of living separately in separate apartments,” he said.
Rental prices can impact the economy beyond the housing sector, Ganduri said. When people spend more on rent, they often tighten their budget in other areas.
This story comes to Rough Draft through a reporting partnership with GPB News, a non-profit newsroom covering the state of Georgia.