Home rents just posted an annual decline for the first time since March 2020

It's happening. Rents are coming down, for realsies. The median U.S. asking rent fell 0.4% year over year to $1,937 in March, per a Redfin analysis.

Why it matters: It's the first annual decline since March 2020, when, well, you know.

What's happening: It's a supply and demand story.

• Demand is falling because people appear to have reached their price limits. Rents are still 20% higher than they were right before the pandemic, overall inflation is hurting and there's growing economic uncertainty.
• Supply is rising because hundreds of thousands of newly constructed multifamily apartments came on the market last year, at a record pace, per an analysis of Census data on new residential construction, conducted by the Joint Center for Housing Studies of Harvard University.

Reality check: This doesn't mean everyone can suddenly afford a better place to live. Rents are still historically high.

• And they're not falling everywhere. While they're down 9% from last year in Chicago and 11% in Austin, rents are still soaring in Raleigh (up 17%) and Cleveland (15%). (See the full lists here.)
• Meanwhile, a lot of that new construction is in high-cost rentals, as the Center notes.

Go deeper: More signs are emerging that rent inflation has peaked