Rental Market Will Slow Through 2023: The Kiplinger Letter
Expected growth in the rental market is likely to remain slow for the rest of the year amid a slow housing market and cooling economy.

To help you understand what is going on in the rental and housing markets and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
Expect growth in the rental market to keep slowing for the rest of the year after increasing just 0.3% nationally in the third quarter. Effective rents were up only 0.1%. The gap between asking and effective rents has widened, showing that some landlords are offering more free rent to entice new tenants.
Even so, rent growth is likely to be weak in the Sun Belt metro areas, which saw the fastest rising rent rates in 2021 and the first half of 2022. Now, the region has the largest imbalance of supply and demand, with record numbers of new units up for lease but too few renters. Rent growth should be stronger in Northeast and Midwest cities, particularly Jersey City (New Jersey), Cincinnati, Milwaukee, Chicago, Boston and Kansas City metro.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Apartment vacancy rates will edge up by the end of the year. Vacancies fell nationally by 5% in the third quarter, up 0.% from a year ago. The vacancy rate has risen steadily since the middle of last year, as supply now outweighs demand. Meanwhile, an influx of new apartments is hitting the market, as completions are set to rise sharply over the next year. Relatively low vacancy rates and rising rents pushed developers to move forward with multi-family projects over the past few years.
It’s possible that developers could delay some projects amid softer market conditions and take stock of the slowdown in remodeling projects. Increased prices and higher interest rates are leading homeowners to spend less. Larger projects are seeing a particular pullback, but spending on smaller jobs is slowing, too.
Similarly, the impact of higher interest rates on remodeling has been muted so far because most homeowners were still relying on savings rather than financing the project. Spending on remodeling is on track to grow around 3% this year, a far cry from the 16.3% increase in 2022. Sluggish home sales are a big reason, as remodeling and repair activity typically ramp up as owners prepare for a sale.
There are two reasons for further declines next year: a slow housing market and a cooling economy. Homeowners are likely to pull back on high-end projects and focus on necessary replacements and smaller projects. However, spending on energy-efficient retrofits may be strong in 2024 because of federal incentives.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Related Content

Rodrigo Sermeño covers the financial services, housing, small business, and cryptocurrency industries for The Kiplinger Letter. Before joining Kiplinger in 2014, he worked for several think tanks and non-profit organizations in Washington, D.C., including the New America Foundation, the Streit Council, and the Arca Foundation. Rodrigo graduated from George Mason University with a bachelor's degree in international affairs. He also holds a master's in public policy from George Mason University's Schar School of Policy and Government.
-
Alaska Airlines to Buy Hawaiian: Get Bonus Miles Now
How to use the Alaska Airlines credit card and frequent flyer program to save on trips to Hawaii, Alaska and beyond.
By Ellen Kennedy Published
-
11 Reasons to Consider a 1031 Exchange
Deferring capital gains taxes might be at the top of the list, but growing your portfolio and your wealth and helping with estate planning are also compelling reasons.
By Daniel Goodwin Published
-
As Mortgage Rates Rise, Renting Is Now Cheaper Than Buying for Many: The Kiplinger Letter
The Kiplinger Letter A jump in mortgage rates has caused housing affordability to slump and priced many first-time home buyers out of the market.
By Rodrigo Sermeño Published
-
FDA Approves Zepbound, the Latest Weight-Loss Drug: The Kiplinger Letter
The Kiplinger Letter Eli Lily’s Zepbound will undercut its rivals’ pricing but still costs over $1,000 a month.
By John Miley Published
-
More Signs of Belt-Tightening and a Slowing Economy: The Kiplinger Letter
The Kiplinger Letter Although fewer banks are tightening lending standards, more businesses and households are feeling the squeeze.
By Rodrigo Sermeño Published
-
The Recent Uptick In Global Trade Won’t Last: The Kiplinger Letter
The Kiplinger Letter Global trade continues to fall as economic growth around the world cools.
By Rodrigo Sermeño Published
-
Consumers Have $1 Trillion More Savings Post-Pandemic: The Kiplinger Letter
The Kiplinger Letter GDP data show Americans have more savings than they did pre-pandemic.
By David Payne Published
-
Once-Booming Gun Sales Have Slumped: The Kiplinger Letter
The Kiplinger Letter Since 2022, FBI background checks, a close proxy for gun purchases, have slumped.
By Sean Lengell Published
-
The Era of Super-Low Interest Rates Could Be Over: The Kiplinger Letter
The Kiplinger Letter We’re likely never going back to the historically low rates that prevailed in late 2019 and early 2020.
By David Payne Published
-
Passport Processing Times Speed Up: The Kiplinger Letter
The Kiplinger Letter The State Department credits an increase in staff and new technology with shrinking processing times.
By Sean Lengell Published