There’s good news for America’s legions of renters who, thanks to the pandemic housing frenzy and, ironically, the policy actions taken to extinguish it, have seen the dream of homeownership drift even further out of reach.

Rents are now falling on a YoY basis, which presumably means one could shop around for a better deal instead of renewing an existing lease, depending on locale.

According to Redfin, the median asking rent in March fell to a 13-month low of $1,937, down 0.4% from the same month a year ago.

It was the first 12-month decline since the onset of the pandemic.

The color accompanying the update suggested it’d be a stretch to describe $1,937 as “cheap.” As Redfin was quick to note, rents are still almost 20% higher compared to pre-pandemic levels, even after dropping to a one-year low.

In explaining the decline, Redfin cited a supply surplus, which is the opposite of what would-be homeowners are confronting in the market for existing houses. Multifamily starts and completions (i.e., buildings with five or more units) reached their highest levels since the 80s last month.

The latest CPI report, out earlier this week, suggested the pace of shelter inflation is at least slowing. The lag with home price appreciation trends is long.

Markets will get an update on housing starts and US existing home sales next week.

In the context of the Fed’s inflation battle, the drop in rents is certainly good news. Jerome Powell and his colleagues are counting on “pipeline” housing disinflation, and it looks like they’ll get it.

More broadly, though, I’m not sure this is a constructive development to the extent it’s a product of hastily-built multifamily “communities” (note the scare quotes). As I’ve lamented in these pages repeatedly, I worry about a scenario in which too many Americans are herded into apartment complexes, and compelled by housing market dynamics to remain there in perpetuity, in many cases with their families.

A Redfin real estate agent offered a reality check of sorts. “Rents are falling, but it feels more like they’re just returning to normal,” he said. “It’s similar to eggs. You can say egg prices are ‘plummeting,’ but really they’re [just] making their way back to the norm.”