The rental market boom is showing a seasonal dip. Rent levels dropped in September for the first time in six months, according to the latest market report from Rent.com.

Overall rent levels dipped 2% compared to August, the largest monthly decrease since last year. The national median rent price is $2,011, the cheapest price since April, the research firm found.

Still, prices were slightly higher than a year ago, rising 0.4% due to increased inventory and lower-than-usual demand, as prices had steadily risen since bottoming out in February.

Overall, state rents remain up over the year, maintaining the 2023 trend of a 60/40 split of markets that are up versus down. In September, 62.7% of markets registered a yearly price increase, compared to 37.2% that saw a price decline in the same period.

However, price growth nationally is being held down by below-normal demand and increased inventory, the report noted. 

States With the Lowest YoY Rent Growth

The change in rent prices was not the same across the country. The Midwest saw the largest price hike of 5% growth compared to last year, while rent prices in the West have been declining for several months, declining 1.61% compared to September 2022.

In the West, Montana led declines with a yearly drop of 15.5%. Washington and Oregon also saw the third and fourth-highest yearly decline. Elsewhere, Idaho, Nevada, and Utah declined in the 5% to 8% range.  

In the Northeast, Pennsylvania was the only state to have a large decline, slumping 4.5% year over year. Meanwhile, in the South, Florida led with the highest monthly decline of more than 3%, while other traditionally expensive states, including California, New York, and Massachusetts, also saw monthly declines of over 2%.

State	Year-over-Year Rent Growth	Month-over-Month Change in Rent	Median Rent
Montana	-15.49%	-0.22%	$1,715
Oklahoma	-10.62%	-2.40%	$960
Oregon	-10.09%	-0.73%	$1,702
Washington	-7.96%	-0.97%	$2,312
Idaho	-7.84%	-2.98%	$1,570
Nevada	-5.72%	-0.68%	$1,566
Utah	-5.71%	-1.38%	$1,602
Florida	-5.49%	-3.35%	$2,114
Pennsylvania	-4.50%	-0.95%	$1,651
Virginia	-3.00%	-1.29%	$1,986

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States With the Highest YoY Rent Growth 

Yearly price increases were driven by the Midwest region, where seven of the largest gainers are located. Iowa had the largest yearly increase in the area, jumping 12%. Mississippi leads with the highest yearly rise, skyrocketing almost 16% from a year ago, and was also the only Southern state to make it to the top 10 gainers list. Still, its monthly gains were relatively flat.

Meanwhile, both Dakotas saw a yearly increase despite a 2% decline over the month for South Dakota, with Kansas, Wisconsin, and Illinois also having strong yearly growth. Illinois was the only state with a monthly rent increase above 1.5%.

New York also saw a yearly rise in prices of 11.28% despite a monthly decline, while New Hampshire was flat over the month but rose 7.38% compared to the same period a year ago. 

State	Year-over-Year Rent Growth	Month-over-Month Change in Rent	Median Rent
Mississippi	15.86%	0.06%	$1,175
Iowa	12.13%	-0.97%	$1,158
South Dakota	11.32%	-1.91%	$1,164
New York	11.28%	-2.18%	$2,762
North Dakota	9.58%	0.04%	$1,067
Minnesota	9.41%	-0.21%	$1,599
Kansas	8.99%	0.02%	$1,207
Wisconsin	8.95%	0.27%	$1,534
New Hampshire	7.38%	0.17%	$1,987
Illinois	6.85%	1.81%	$2,019

The Bottom Line

September’s decrease might just reflect a seasonal change that landlords haven’t seen since the pandemic, the report found. In other words, the trend of prices falling in the fall and winter before rising again in the spring and summer could be back. 

While the monthly price declines could be concerning for landlords, the yearly rise in prices shows that the rental market is still strong. And with the Fed not backing down from rising interest rates and housing prices continuing to skyrocket, it’s likely that the rental boom could be here to stay for just a little while longer.

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