We want to hear from readers who have stories to share about the effects of rising costs and a changing economy. If you want to share your experience, write to readersstories@marketwatch.com. Please include your name and the best way to reach you. A reporter may be in touch. Americans looking for housing in April faced asking rents $348 higher than the same period in 2019, with costs up 25.1% from four years ago, a new report shows. Although rental-housing costs are rising at a much slower rate than earlier in the pandemic — average asking prices for studio to two-bedroom rental properties in the nation’s top 50 metro areas rose just 0.3% annually. April will reach $1,734, marking the slowest rate of growth since the start of the pandemic — as renters may still struggle to afford a place, according to a Realtor.com report out Thursday. Here’s one possible comfort, though: Rent growth has been slowing for 15 months now, Realtor.com said, and asking rents in April were actually $43 below last year’s peak. “In April, we continued to see rising rent prices and moderate growth rates,” Daniel Hale, chief economist at Realtor.com, said in a statement. “This is promising news for renters, suggesting that the peaks of the epidemic are behind us, and that the challenging affordability picture may be starting to improve. We’ve seen record-high new construction in the multifamily space, which is creating more units, helping reduce competition and in turn softening prices.” Rental vacancy rates also reached their highest point since early 2021. — and, at 6.4% in the first quarter of this year, are approaching the 7.2% rate that was “the norm from 2013-2019,” Realtor.com said. (Realtor.com is operated by News Corp. NWSA, -1.01% subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.) Slower rent growth weighing on inflation is also important to inflation watchers, because Shelter accounts for a third of the consumer price index. The most recent inflation data from the Labor Department showed that consumer prices rose 0.4% between March and April, with housing costs contributing the most to the increase. But Realtor.com’s “monthly data is based on average asking rents, rather than survey responses, which are used in the CPI index, so the CPI data lags behind what we’re seeing,” Hale said in a statement. “The data suggests that shelter affordability is ahead in future CPI reports. While this may take until 2024 to materialize significantly, it will be welcome news for renters and overall inflation.” Rents typically rose about 3% annually before the pandemic, one researcher previously told MarketWatch, so renters have actually faced larger-than-usual increases over the past few years. Importantly, the data shows that the lowest-income US residents may be struggling the most with higher prices. In 2019, 46.3% of renters were considered “cost burdened,” meaning they spent more than the recommended 30% of their income on rent and utilities, U.S. Census Bureau researchers said in March. That share reached 49% in 2021. The percentage of renters who spent half or more of their income on housing, meanwhile, rose from 23% to 25.4% over the same period. But the lowest-income households — those earning less than about $27,500 — “had an average expense ratio of 62.7% in 2021,” meaning half of those households were putting more than 62.7% of their gross household income toward rent and utilities, the researchers said. The lowest-income households also saw the largest percentage-point increase in their average rent-to-cost ratio of all income groups between 2019 and 2021, up 3 percentage points from the previous level of 59.7%.
