The decline of U.S. rental prices and its impact on Arizona renters

A building boom across the South and Mountain West has cooled rental prices, but maybe not enough to make a difference. Housing is unaffordable for many.

Although the median U.S. rent for new leases is down 1.5% from a year ago, it’s still roughly 20% above pre-pandemic levels, at $1,400 a month, according to real estate experts.

A new Harvard report finds a record number of renters are “cost-burdened,” spending more than 30% of their income on rent and utilities. Both Phoenix and Tucson posted a 4% decline in rental costs.

Catherine Reagor, Senior Real Estate Reporter at The Arizona Republic, joined “Arizona Horizon” to discuss the impact of the decline in rental prices on Arizonians.

“They’re falling across Arizona,” Reagor said, “…but all across the valley they’re down, and in some cases down double digits…Glendale during the past year was 14 percent.”

According to Reagor, one of the reasons why some areas are down more than others has to do with the amount of building being done in Arizona. She emphasized that this is a good thing as there was a shortage, but most of the buildings are high-end apartments.

“…but also the younger generation, the 20s and the 30s,” Reagor discussed, “…are deciding not to buy homes.”

Reagor explained how the numbers are still higher than pre-pandemic, as they went up more than 40% during the pandemic. Pre-pandemic, the median home price in 2019 was under 300, with the median home price now just around 440.

“Our incomes are up, which is great and good,” Reagor said, “…we’ve had higher paying jobs come in…for somebody making the median income trying to afford the median rent, not easy.”

According to Reagor, most 20 and 30-year-olds are not buying homes, but are instead more comfortable with investing in crypto or sports betting.