The U.S. median asking rent climbed by 0.4 percent in February compared to a year earlier to reach $1,607—the first increase in six months and the biggest in nine, according to a new report by Redfin. Compared to January, the median asking rent in the U.S. was up 0.6 percent last month.
While it is a very modest growth, experts warned that landlords may be raising prices as apartment construction slows down across the country—a trend that is likely to hurt renters should it continue.
Why It Matters
The country is in a housing affordability crisis that is impacting both homeowners and renters.
Rents spiked during the pandemic, when a record half of all U.S. renters were cost burdened, according to a study from the Joint Center for Housing Studies of Harvard University. In 2022, 22.4 million renter households spent more than 30 percent of their income on rent and utilities—2 million more than three years earlier.
However, after rapidly overheating in 2021 and 2022, rental markets across the U.S. rapidly cooled in 2023 and 2024, with rents falling in some cities. Researchers found that this sudden slowdown could be largely explained with the growth in inventory in the U.S. rental market, as well as a decline in demand.
What To Know
Rents have been relatively flat for the past 10 months, a much-needed stabilization after years of ups and downs. Between 2020 and 2021, rents climbed by 18 percent; in 2023, they fell as much as 4 percent year-over-year.
Redfin said that “asking rents are now flattening because rental supply and demand are near equilibrium.”
In some of the most-overheated markets in the nation, rents continued falling in February. In Austin, Texas, the median asking rent dropped 9.4 percent year-over-year last month to $1,404—the largest decline among the 44 major U.S. metropolitan areas analyzed by the real estate brokerage.
Rents also fell in Salt Lake City, Utah (-7.8 percent year-over-year) and Jacksonville, Florida (-6.7 percent).
Kevin Carter/Getty Images
Cincinnati, Ohio, reported both the biggest year-over-year increase in the median asking rent (15.3 percent) and the biggest month-over-month increase (2.7 percent) to reach $1,453.
It was followed by Providence, Rhode Island, (up 12.4 percent year-over-year and 0.2 percent month-over-month) at $2,155, and Baltimore, Maryland, (up 9.6 percent year-over-year and 0.3 percent month-over-month) at $1,605.
What People Are Saying
Redfin Senior Economist Sheharyar Bokhari said in a statement: “The era of big rent declines is over for most of the country. A ton of new apartments have hit the market, and demand for those apartments is strong because it’s so expensive to buy a home.
“But apartment construction is starting to slow, which means there may be more renters than apartments to go around as soon as next year. That could cause rents to tick up and the perks that many renters have grown accustomed to—like free parking—to disappear.”
What Happens Next
A record half-million-plus of new apartments were built in the U.S. in 2024, but construction has slowed down since reaching this peak.
In the ongoing national shortage of homes, this slowdown is likely to lead to new rent increases this year. Higher costs across the board—including the cost of repairs and wages for repair and maintenance workers—are also likely to meant that landlords would continue passing these expenses along to renters.