Renters in Philadelphia have some reason to rejoice.
As part of a nationwide trend, rent growth in the metropolitan area continues to slow to pre-pandemic levels, according to new research from real estate company Zillow. This as high mortgage rates and overvalued home prices continue to force many renters to hold off on buying because they can’t afford it.
“Renters are finally getting a breather,” said Zillow senior economist Orphe Divounguy.
Typical rent in the metro remains high, but rose just 0.4% from May to June, according to the report. That translates to $1,864 — about $150 less a month than the typical rent across the country.
Year-over-year, rents here have increased 3%, putting the metro around the middle of the pack when comparing other big cities. Washington, Boston, and New York all had higher increases and remained more expensive than Philadelphia.
Nationally, rents are up 4.1% over the same time last year, reaching $2,054.
“Essentially, we’re seeing a return to normal. While rents are still very high, and they’ll probably never return to their pre-pandemic level, rent growth has slowed considerably from the record high 16% annual rent increase in February of 2022,” said Divounguy.
The relief is the result of high supply and weak demand, the opposite of what renters saw during the first two years of the pandemic, when prices surged by double digits.
Affordability is still a big issue, however. Millions across the country are still doubling up with loved ones to keep a roof over their heads.
“Housing just generally is unaffordable. Buying a single-family home is tough given the high house prices and high mortgage rates. And renting is tough because rents took off in the wake of the pandemic,” said Mark Zandi, chief economist at Moody’s Analytics.
Philadelphia continues to experience an affordable housing crisis, even as thousands of new apartments are being built each year.
Citywide, more than 28,000 housing units were in progress by the end of 2022, according to the Center City District. The overwhelming majority of them will be market-rate apartments.
By the end of 2021, the last year before significant changes to the city’s 10-year tax abatement took effect, there were more than 34,000 housing units in progress, according to CCD.