Explore the recent national and regional changes in rent prices across the U.S. and their impact on corporate housing. Learn about the factors influencing the trends for 2025.
by · Jan 6, 2022
The rental market continues to evolve, with complex patterns affecting both traditional apartments and corporate housing costs. Understanding these trends is crucial for businesses and individuals seeking temporary housing solutions.
The rental market in 2024 tells an interesting story of regional variations and changing dynamics.
Recent analyses from Apartment List and Rent.com indicate a slight decline in national rental prices over the past year. Both sources report similar trends but slight differences in specific figures.
As of November 2024, Apartment List reports a national median rent of $1,382, reflecting a 0.8% decrease from the previous month and a 0.6% decline year-over-year. This marks nearly 18 months of negative annual rent growth. Despite these declines, current rents remain approximately $200 higher per month compared to a few years ago. The national vacancy index has risen to 6.8%, the highest since the pandemic began, due to a significant influx of new apartment completions—the third quarter of 2024 alone saw the most new units completed in 50 years.
Source: Apartment List reflects rents paid for new leases.
Rent.com’s November 2024 report indicates a median U.S. asking rent of $1,595, showing a 0.7% year-over-year decrease and a 1.1% drop from the previous month. Rents are now at their lowest since March 2022 and 6.2% below the peak of $1,700 in August 2022. The report highlights that cities with high levels of new apartment completions, particularly in the Sun Belt, are experiencing more significant rent declines.
When we break down the data by bedroom type, the complexity of the market becomes even more apparent:
This seemingly contradictory trend – where overall rents rise while individual categories show decreases – demonstrates the intricate nature of today’s rental market. Known as Simpson’s paradox, this statistical phenomenon reflects the various forces at play in different market segments.
Source: Rent.com’s data is based on asking rent rates.
While some markets show signs of stabilization, others continue to experience significant growth. Construction levels play a crucial role in these differences. In areas where new building has been limited, rents continue to climb, driven by several factors:
Major metropolitan areas tell a particularly compelling story. In cities like San Jose and Los Angeles, where more than half of households rent rather than own, the pressure on rental prices remains constant. This high concentration of renters creates unique challenges and opportunities for traditional apartment rentals and corporate housing providers.
The current high-interest-rate environment has created significant ripple effects throughout the housing market. Many potential homebuyers find themselves priced out of purchasing, leading to:
These factors directly impact corporate housing availability and pricing as providers compete for suitable properties in desirable locations.
The housing industry continues to face several obstacles affecting both traditional rentals and corporate housing:
The way we work has fundamentally changed since 2020, and these changes continue to influence housing preferences as we move into 2025. Rather than a temporary shift, we see lasting transformations in how companies and employees view the relationship between work and living spaces.
Today’s workforce expects flexibility, and housing preferences reflect this new reality. Corporate housing providers have adapted their offerings to accommodate these changes:
More importantly, these changes have influenced where people choose to live. While urban centers remain popular, we’re seeing increased interest in suburban locations that offer:
The 2024 Apartment List Renter Migration Report reveals that while pandemic-induced migration patterns are stabilizing, significant trends persist. In 2023, 38.5% of users considered relocating to a new metro area, a decrease from 40.7% in 2022, indicating a growing preference to remain in current regions. Despite this, there’s a continued exodus from high-cost states like California and New York toward more affordable Sun Belt and Mountain West regions. California experienced a net loss of 338,000 residents, while Florida gained 194,000, underscoring the ongoing appeal of states with lower living costs.
The report also highlights that renters moving to new metros typically have higher budgets than local residents, potentially exacerbating affordability challenges in popular destinations. For instance, Californians relocating to Texas had budgets averaging 29% higher than existing Texas renters. This influx of higher-income renters can drive up local rent prices, impacting affordability for long-term residents.
Overall, while migration rates are normalizing post-pandemic, the movement from expensive coastal states to more affordable regions continues to shape the rental market, influencing local economies and housing affordability.
Source: Apartment List
Corporate housing providers face unique challenges and opportunities in this evolving market. The relationship between traditional rental rates and corporate housing costs remains complex, but several key factors influence pricing:
When traditional apartment rents increase, corporate housing rates naturally follow. However, the impact varies by:
Corporate housing providers distinguish themselves through comprehensive service packages:
These services become even more valuable in a market where setting up a temporary home can be both expensive and time-consuming.
Corporate housing offers significant benefits to businesses and individuals needing temporary accommodations despite market pressures. Understanding these advantages helps explain why many choose corporate housing over traditional rentals or extended-stay hotels:
While initial rates might seem higher than unfurnished apartments, corporate housing often proves more economical when considering:
Corporate housing providers can often secure properties in areas where traditional rentals might be scarce:
The value of professional management becomes particularly apparent in a complex market:
As we move through 2024, several trends will likely influence traditional rental and corporate housing markets. Understanding these trends helps businesses and individuals make informed housing decisions:
The immediate future suggests continued market adjustment:
Looking further ahead, several factors will shape the market:
For those seeking corporate housing in the new year, several strategies can help navigate the current market:
Plan your housing needs with these factors in mind:
Balance multiple factors when choosing a location:
While the rental market continues to evolve, corporate housing remains a vital solution for businesses and individuals needing temporary accommodations. Understanding current market trends helps in making informed decisions about housing options.
Working with experienced providers like Viciniti can help navigate these complex market conditions. Our local expertise and commitment to customer service ensure that clients find housing solutions that meet their needs and budget constraints.
If you are relocating, traveling for business, between homes, or needing temporary housing, let the experts at Viciniti help you navigate the process.
With local offices in many midwestern cities, they understand the local economies and can recommend corporate apartments that will fit your budget. Browse the apartments available in the city where you’re headed to learn more. Then contact us to get started!
About the Author: Lynda Najera, CCHP, is the Vice President of Viciniti and has vast experience in corporate housing. She has been with the company since 1991, working as part of a team of professionals dedicated to delivering exceptional service and value in the corporate housing industry.
