How to navigate peak rental season

Each year, July is one of the peak times for moving. 

In recent years moving in July has typically involved some sticker shock. High home prices, and equally lofty rental costs have left young adults between a rock and a hard place as they try to find a place to launch out on their own.

But now there’s some good news: The rental market is finally softening. In fact in this year’s first quarter, average rents at professionally managed properties declined by .5% year-over-year, according to new data from Harvard’s Joint Center on Housing Studies.

“Looking nationally at the rental market, we’ve seen a wave of new multi-family supply, and we’ve seen rental demand slip because of economic uncertainty,” says Peyton Whitney, a JCHS research analyst who worked on the report. “So we’ve being seeing rent averages starting to decline.”

In fact May marked the 34^th consecutive month of declines for 0-2 bedroom apartments across the nation’s 50 largest metros, according to Realtor.com’s Rental Report. The median rent across those areas is now $1,686, down 4.4% from its peak in the summer of 2022.

That means renters might finally be getting the upper hand again when it comes to price, negotiations about terms or upgrades, and whether or not your application is likely to get accepted in the first place. 

As with any dealmaking, you should go in armed with as much data as you can get. You should also be bolstering your own case, stashing savings and boosting your credit score, so that you’re an easy candidate for potential landlords to choose.

A few key tips as we enter peak rental season:

-Information is your friend. Do your due diligence in researching the trends of your local market, comparable rents for the apartments you’re targeting, and how long listings have been sitting on the market.

National figures aren’t really helpful, since all real estate is inherently local. Your leverage depends on where you live. Says Whitney: “We’re seeing the most downward pressure on rents in the South and West, where a lot of new housing supply is concentrated, and where vacancy rates are highest.”

To help you figure out whether renting or buying is the savvier financial option in your particular location, check out Zillow’s Rent vs. Buy calculator.

Make yourself an attractive candidate. For an appealing rental apartment, a landlord will likely have a few options for tenants. So you want to make your application a no-brainer for them to choose.

How to do so? “Getting finances in order,” suggests Zillow chief economist Mischa Fisher. “The median household would spend 26.7% of their income on a new rental, so documenting income at or above that threshold reassures landlords of stability. 

“Having references, pay stubs, and ID documents ready signals a serious, low-risk tenant, which matters especially when landlords are offering concessions and want to ensure the tenant they’re subsidizing will stick around.”

Have enough cash on hand to cover traditional requirements like first and last month’s rent, and potentially other charges like security deposits or broker’s fees. To earn interest on those savings until you find the perfect spot, look into higher-yielding accounts. With Current’s Savings Pods, members can earn up to a 4.00% annual bonus on money in their Savings Pods.

Landlords will also check your credit score to ensure you’re not a risk for non-payment, so make sure that number is in a zone that will make them comfortable. A score above 740, for instance, is considered very good. To get to that level, secured charge cards like the Current Build Card could be a great option to help increase your score when you make on-time monthly payments. Members have seen an average credit score increase of 81 points six months after enrolling in the Build Card.

-Negotiate. Now that renters have more leverage than they used to, you should definitely brush off those negotiating skills. 

You have the most power before you’ve actually signed on the dotted line, but even if you’re already in an apartment, you could negotiate a discounted renewal (especially if rents in the community are falling). Landlords might be more flexible when offered longer terms, or they could be open to temporary price cuts, such as during non-peak months. 

“Nearly 40% of rental listings are now offering concessions, the most deals ever recorded for this time of year,” says Zillow’s Fisher. “These are incentives like free rent, waived fees, and discounted move-in costs.”

Also look at non-monetary items that might make your life easier, like upgraded appliances, or a monthly parking spot, or needed repairs. When it comes to negotiation, as the saying goes: The worst they could do is say no. And if they do say no, you now have more options than you did before.