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The rental market is becoming more competitive this spring, with rent costs seeing a slight increase in March. According to new data from Apartment List, the median rent nationwide rose by 0.6% last month, reaching $1,388. This marks the second consecutive monthly increase after six months of decline.

Although rents have gone up in 81 of the top 100 cities in March, the overall trend over the past year shows a decrease of 0.8%. This downward trend is expected to continue, as the market is being cooled by an influx of new multifamily units in the Sun Belt region.

As a result of the surge in new apartment supply, vacancies have increased, with the national index reaching 6.7%, the highest since July 2020. This trend of easing multifamily occupancy is likely to continue, with more new units expected to enter the market this year.

Rent prices have been a significant factor in inflation, with shelter costs accounting for about two-thirds of the annual increase in consumer prices. However, the slowdown in rent prices that began in 2022 is expected to bring down inflation pressures later this year.

According to Apartment List, their National Rent Index has been a strong indicator of CPI housing and rent components. The index captures price changes in new leases, which are later reflected in price changes across all leases. As rent growth cools off, it is expected to help ease overall inflation as well.

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