New apartment supply and rise of 'accidental landlords' help cool rent growth nationwide
Rent growth slows to 1.9% amid persistent supply glut, giving renters more leverage after years of rapid rent increases
- The year-over-year increase in the typical
U.S. asking rent eased to 1.9% in February, according to the Zillow Observed Rent Index. - Nearly 40% of rental listings on Zillow offered concessions, such as free rent or waived fees, in February.
- While affordability is improving, a household needs to earn about
$76,000 a year to afford the typical rent — nearly$20K more than before the pandemic.
The moderation is being driven by expanding supply. A boom in apartment construction has pushed vacancy rates higher and slowed multifamily rent growth to 1.4% annually, down from nearly 16% at the height of the 2022 rental frenzy.
Cooling conditions in the for-sale market are also contributing to rental supply. Late last year, a near-record number of homeowners who were unable to sell chose to rent out their properties instead. These "accidental landlords" are adding single-family homes to the rental pool. Single-family rents rose 2.6% year over year in February, the slowest annual growth in Zillow's records dating back to 2015. For comparison, single-family rent growth averaged about 4.4% annually before the pandemic.
"Renters are gaining leverage, and that advantage is expected to continue as new supply comes online," said Orphe Divounguy, senior economist at Zillow®. "An increase in both apartment buildings and single-family rentals means landlords must continue to compete more on price and incentives."
Affordability improves, but pressures persist
As incomes have grown slightly faster than rents over the past year, affordability for new renters has modestly improved. A renter household that earns the median household income now spends 26.3% of its income on rent, down slightly from a year ago. Still, a household needs to earn about
The good news for renters: More rental options have boosted bargaining power and helped cool rent growth. Concessions remain common as well, with 39.2% of listings on Zillow offering incentives, such as free rent or waived fees. While that share is down slightly from a year ago, by historical standards, it remains elevated.
Local markets move at different speeds
In February, the pace of annual rent increases decelerated in 34 markets when compared to the previous month.
Rents fell on a year-over-year basis in eight of the 50 largest
Among the 50 largest markets,
What's ahead
Rent growth is projected to remain modest in 2026, with single-family rents forecast to rise 1.8% and multifamily rents 0.9% by
For renters, more supply may mean greater negotiating power. Zillow connects renters to apartments, single-family homes and rooms for rent — all in one place — and the rent affordability calculator helps ensure the match fits the budget. For property managers, it means pricing competitively and utilizing the right tools to make their listings stand out.
|
Metro Area |
Typical Rent, |
Typical Rent, |
Typical Rent, |
Renter |
Share of Rental |
|
|
|
0.4 % |
1.9 % |
26.3 % |
39.2 % |
|
|
|
0.5 % |
4.2 % |
37.1 % |
19.0 % |
|
|
|
0.2 % |
1.1 % |
33.9 % |
30.0 % |
|
|
|
0.9 % |
5.5 % |
26.8 % |
22.0 % |
|
|
|
0.3 % |
0.2 % |
19.9 % |
61.8 % |
|
|
|
-0.1 % |
-0.4 % |
22.7 % |
51.1 % |
|
|
|
0.5 % |
0.2 % |
21.1 % |
56.1 % |
|
|
|
0.6 % |
3.1 % |
23.3 % |
32.9 % |
|
|
|
0.2 % |
0.5 % |
37.3 % |
27.9 % |
|
|
|
0.2 % |
1.6 % |
22.3 % |
56.2 % |
|
|
|
0.6 % |
1.9 % |
29.7 % |
32.1 % |
|
|
|
0.4 % |
-0.7 % |
21.8 % |
57.6 % |
|
|
|
1.1 % |
6.3 % |
25.9 % |
30.4 % |
|
|
|
0.4 % |
1.7 % |
30.9 % |
28.1 % |
|
|
|
0.2 % |
2.4 % |
21.8 % |
27.0 % |
|
|
|
0.2 % |
1.8 % |
22.2 % |
53.9 % |
|
|
|
0.6 % |
4.0 % |
19.4 % |
40.7 % |
|
|
|
0.5 % |
1.6 % |
29.8 % |
36.5 % |
|
|
|
0.3 % |
-1.4 % |
28.6 % |
49.9 % |
|
|
|
0.3 % |
-1.0 % |
19.4 % |
68.6 % |
|
|
|
0.3 % |
2.5 % |
21.5 % |
39.3 % |
|
|
|
0.2 % |
3.5 % |
19.5 % |
26.4 % |
|
|
|
0.3 % |
0.2 % |
27.0 % |
51.1 % |
|
|
|
0.3 % |
0.5 % |
22.6 % |
64.1 % |
|
|
|
0.2 % |
-1.6 % |
20.2 % |
54.8 % |
|
|
|
0.3 % |
0.9 % |
20.4 % |
49.6 % |
|
|
|
0.2 % |
2.1 % |
25.4 % |
31.6 % |
|
|
|
0.2 % |
3.8 % |
21.1 % |
26.9 % |
|
|
|
0.7 % |
3.5 % |
21.5 % |
24.2 % |
|
|
|
0.5 % |
-2.4 % |
17.9 % |
63.6 % |
|
|
|
0.4 % |
-0.1 % |
24.5 % |
52.9 % |
|
|
|
0.4 % |
3.5 % |
20.1 % |
37.1 % |
|
|
|
0.5 % |
1.7 % |
20.3 % |
45.3 % |
|
|
|
0.1 % |
2.6 % |
21.3 % |
44.2 % |
|
|
|
0.8 % |
5.0 % |
22.6 % |
27.8 % |
|
|
|
0.7 % |
5.1 % |
23.2 % |
34.6 % |
|
|
|
0.2 % |
0.2 % |
22.8 % |
62.1 % |
|
|
|
0.5 % |
5.7 % |
24.6 % |
27.6 % |
|
|
|
0.7 % |
4.8 % |
29.1 % |
13.2 % |
|
|
|
0.5 % |
0.7 % |
23.1 % |
47.3 % |
|
|
|
0.2 % |
3.5 % |
21.8 % |
29.5 % |
|
|
|
0.4 % |
2.6 % |
21.1 % |
29.7 % |
|
|
|
0.4 % |
0.2 % |
18.4 % |
62.8 % |
|
|
|
-0.2 % |
1.2 % |
23.8 % |
38.8 % |
|
|
|
0.7 % |
3.9 % |
22.8 % |
45.7 % |
|
|
|
0.0 % |
1.9 % |
20.9 % |
41.1 % |
|
|
|
0.3 % |
0.2 % |
28.8 % |
16.1 % |
|
|
|
0.1 % |
-0.7 % |
18.1 % |
67.6 % |
|
|
|
-0.1 % |
2.5 % |
22.8 % |
24.1 % |
|
|
|
0.5 % |
3.6 % |
21.7 % |
9.5 % |
|
|
|
0.2 % |
1.6 % |
21.1 % |
40.8 % |
*Table ordered by market size
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