Free Rent! Landlords Offering More Concessions

Landlords across the country are offering more perks to attract would-be renters as the rental market has softened considerably in the last few months, according to an analysis released Tuesday by Zillow.

In July, 30.4 percent of rental listings on Zillow offered some sort of concession – up from 16.2 percent in February and just 12.5 percent in July 2019. At the same time, growth in rent costs has slowed from 3.9 percent to 1.2 percent over the same period.

“Before the pandemic, rent growth was accelerating and the nation was seeing concessions dwindle. That trend reversed sharply after the pandemic hit in February,” Zillow economist Joshua Clark said. “In a softer rental market, landlords are trying to push the right button to bring renters into their space.”

Free rent is by far the most common concession landlords are offering, Zillow found:

Renters find the most discounts in Washington D.C., with 57.5 percent of listings advertised at least one type concession in July. Charlotte (53 percent) and Austin (47.1 percent) had the next most, Zillow found. These are all up dramatically from July 2019, when 27.4 percent of rentals in Washington D.C. were offered with concessions, Charlotte had 29.4 percent and Austin just 15.3 percent. The only metro that saw concessions go down since February is Jacksonville, which was down 0.8 percentage points.

“Concessions can often be a leading indicator of a coming price drop in that landlords will often offer them first, before reducing rent. If owners feel concessions are no longer moving the needle, they’ll reduce prices,” Clark said. “Many landlords prefer to offer a concession rather than cut rent and set a precedent that could linger when the market picks back up.”