Rental housing costs on O'ahu are expected to decline more this year than they have in many years, according to a survey that has identified one silver lining in the state's faltering economy.

The average asking rent for homes on O'ahu was $1,704 in January, down $124 from last year's monthly average of $1,828, according to a survey by local housing market researcher Ricky Cassiday.

The 6.8 percent drop follows three years of roughly flat rental rates that occurred while the local housing market remained relatively stable after a five-year boom in which average monthly rental rates soared by almost $900 from 2000 to 2005.

Rents will likely continue to fall over the next few years in reaction to the local economic contraction that has reduced the capacity of households to shoulder expenses, Cassiday said.

"I don't see anything that's going to make rents go up," he said. "The rental market is experiencing its own recession-borne slump."

Cassiday's report, which includes apartment and single-family-home rentals, showed that the previous biggest drop in asking rents was 3 percent in 1994. Older data were not immediately available.

Part of this year's decrease in asking rents reflects the reality that tenants beset by wage cuts and job losses can't afford to pay higher rents.

Sometimes tenants are forced to seek lower-quality housing, or at the extreme, are forced into homelessness — a growing problem. Other times, landlords are recognizing the limitations of tenants and are reducing rents.

Marilyn Rodgers, an entrepreneur who recently moved into a long-term rental at the Maile Sky Court in Waikiki after she and her husband, Buck, sold their Kailua home, said rental rates appear to be easing.

Rodgers, a musician and marketer of a device to detect drugs in drinks, said her two musician sons, Jai and Danny performing as the Buckz Boys Band, in January moved into a Waikiki rental where the landlord accepted $1,200 a month for rent, or $100 less than what the previous tenant had been paying.

Renters make up about 40 percent of the state's population, which historically has faced some of the highest rental rates in the country.

Hawai'i's contracting economy, which has exhibited declining employment and personal income, is pushing more people into the rental market, including growing numbers of people losing their homes to foreclosure.

Cassiday, however, said he doesn't anticipate a much greater drop in asking rents because supply isn't growing significantly in the face of rising demand.

"Housing is a basic necessity, and the imbalance between supply and demand, particularly at the lower end of the market, will act to prevent rents from falling very much," he said in the report.

Cassiday said new-home sales, a portion of which expands rental inventory, are expected to drop to their lowest number in at least 30 years as builders reduce construction.

Cassiday's measure of rents is based on monthly samples of newspaper advertisements. His report said monthly ad counts had been around 700 during the real estate market boom, and since 2006 have been over 1,000. In January, he said, there were 1,166 rental ads, up from 1,095 a year earlier.