May rents in the Allentown metro area were higher than in April but still slightly less than a year ago, as they continue to settle from a pandemic high.
Vacancy is also rising, though it still isn’t close to pre-pandemic levels.
According to the latest national rent report from Apartment List, Allentown rents rose 2.6% last month. The median rent for a one-bedroom apartment was $1,158; for a two-bedroom unit, it was $1,507.
The overall median rent of $1,454 is 0.2% less than it was in May 2022 and 30.2% more than before the pandemic.
Nationally, Apartment List’s rent index grew 0.5% over the course of May. This is the fourth straight monthly increase in rent prices, the report said, but “rent growth is flattening out at a time of year when it’s normally picking up steam. Rent growth this year is coming in slower than average, and even though prices are trending up again, a combination of sluggish demand and increasing supply is keeping prices in check.”
Year-over-year rent growth is at 0.9%, its lowest level since March 2021. It’s well below the 2.8% pre-pandemic average rate from 2018 to 2019 and “could possibly even dip into slightly negative territory in the months ahead,” the report noted.
On the vacancy side, Apartment List’s national vacancy index has been climbing since bottoming out at 4.1% in October 2021, in the midst of COVID-19.
From last September through May, it rose an average of 21 basis points a month and is at 7% in the most recent rent report. That’s higher than the pre-pandemic vacancy rate average of 6.6% from 2018 to 2019.
In the Allentown metro area, the vacancy rate was 4.33% in May. That compares with a pandemic low of 1.64% in September 2021 and a pre-pandemic high of 6.67% in December 2019.
Apartment List predicts that the vacancy rate will continue to climb nationally.
New apartment construction is recovering from pandemic-related disruptions, the report said, and there are now more multifamily units under construction than at any point since 1970. “As this new inventory continues to hit the market over the course of the year, we are now entering a phase in which property owners are beginning to compete for renters to fill their units, a marked change from the prevailing conditions of the past two years, in which renters have been competing for a limited supply of available inventory.”
Paula Wolf is a freelance writer