Trends in the U.S. rental market showcasing rising and falling asking rents across cities.
The U.S. rental market has shown a slight decline in median asking rents, dropping by 1% year-over-year to $1,633. Despite an increase of 0.5% month-over-month, the rental landscape varies widely across major cities. Some cities like Austin and Minneapolis have experienced significant declines, while others, including Cincinnati, have seen notable increases. The high vacancy rate and rising construction indicate ongoing shifts in demand versus supply in the rental market, with a considerable affordability gap for homebuyers. The current scenario suggests a complex and evolving rental environment.
In an interesting turn of events, the median asking rent across the U.S. has experienced a slight dip of 1% compared to last year, now sitting at $1,633. This figure is notably $72 lower than the record high of $1,705 that was set back in August 2022. While some may see this as a sign of relief, it’s important to note that on a month-over-month basis, asking rents actually went up by 0.5% in May, which is pretty normal for this time of year.
An analysis of 44 major core-based statistical areas (CBSAs) reveals that a whopping 28 cities saw a decline in asking rents last month. This marks the highest tally of losses since September 2023. It appears that while there is still a strong demand for rental housing, the pace just isn’t keeping up with the significant rise in apartment construction, which is nearing a 50-year high.
It might also be a good time to highlight that the rental vacancy rate for larger buildings (those with five or more units) stood at 8.2% during the first quarter of 2025, tying with early 2021 for the highest rate. Less than half of newly constructed apartments are being rented out within three months, which is also concerning and reflects one of the lowest shares on record.
When we break it down city by city, Austin, TX, is making headlines for the largest year-over-year decline, with an impressive 8.8% drop bringing its median asking rent down to $1,385. That’s a noteworthy $414 lower than the record high set in August 2023. Other cities joining the decline bandwagon include Minneapolis, falling 6.3%, Columbus, OH at a 3.5% decrease, and Nashville, which saw a 3.4% drop.
However, it’s not all doom and gloom; Cincinnati has surprised many with a remarkable 7.4% increase, pushing its median asking rent up to $1,460. Tampa, FL, is also raising eyebrows with a 4.2% increase, and cities like St. Louis, Pittsburgh, and Birmingham are showing smaller but significant rises.
As we look deeper into the asking rents, May’s numbers exhibited minimal volatility, especially when compared to the wild fluctuations experienced during the pandemic. Over the last 15 months, we’ve mostly seen changes of 1% or less. Remember the pandemic days? Rents swayed dramatically with increases hitting highs of 17.7% and declines reaching 4.1%.
Interestingly, cities like Chicago, Memphis, and Washington, D.C. are hitting new records. Chicago’s asking rents went up by 1.9% to hit $1,781, while Washington, D.C. climbed to a stunning $2,104 with a 2.4% increase.
Delving into different apartment sizes reveals that the median asking rent for 0-1 bedroom apartments decreased by 0.7% to $1,492, 2-bedroom apartments saw a 1.8% drop to $1,704, and 3+ bedroom apartments fell slightly by 0.2% to $2,009. These numbers suggest a general downward trend in rental prices.
For potential homebuyers, the news feels a tad more daunting. The typical homebuyer now needs to earn over $50,000 more than the average renter just to keep up with monthly payments, thanks to skyrocketing home prices and mortgage rates widening that ever-important affordability gap.
In summary, the current rental landscape showcases a complex picture with notable variations across cities. With a high construction rate and shifts in demand, it’s a waiting game for many looking to rent or buy. Whether you’re on the hunt for a new home or just curious about how the market is evolving, there’s no doubt the rental scene is one to watch in the coming months!
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