As Rent Declines Nationally, Some Declare 2025 a ‘Renter’s Market’

A sign is posted in front of an apartment building with available rentals in San Francisco on June 9, 2023. Justin Sullivan/Getty Images

The national median rent, at $1,695, is on the decline nationwide, according to a Realtor.com report, leading some experts to characterize 2025 as a “renter’s market.”

In December 2024, the latest rent price was $18 lower than a year ago and down $8 from November 2024.

“Falling rents indicate that supply is greater than demand meaning landlords need to drop their monthly rent in order to stay competitive in the market,” Holden Andrews, founder and CEO of Helpful Home Group, a real estate investing company that buys houses nationwide, told The Epoch Times.

The report found that the peak rent price, reached in July 2022, was $1,700, with the largest annual rent decreases occurring in the Midwest and the South, including Cleveland, Chicago, Milwaukee, Memphis, Austin, and Nashville.

“It means cheaper rent, which will result in everyday Americans having more money every month for savings, emergency funds, and discretionary spending,” Andrews said.

For example, Memphis, Denver, and Austin had the greatest declines at 6.7 percent, 5.9 percent, and 5 percent, respectively. Nashville followed with a 4.4 percent decline.

“Any renter’s market will be a local phenomenon because all real estate is local,” San Francisco-based real estate consultant Graham Hill told The Epoch Times.

Zillow data show that Austin rents fell for apartments and condominiums by $117 in the past 12 months.

The supply of inventory outweighing demand is driving Austin landlords to offer incentives such as free rent or gift cards to fill vacancies, according to Andrews.

“This will continue to benefit renters until things equalize and supply meets demand or supply is less than demand,” he said. “It is interesting to see how these buildings are incentivizing renters to entice them to sign a lease.”

Michael Clarke, founder and CEO of the home management platform Pulled, suspects the national downward trend in rental cost is temporary.

“Determining how long this will last will depend on the economy, interest rates, and the pace of new construction,” he told The Epoch Times via email. “If the market overcorrects, prices could eventually start climbing again.”

Last week, the Federal Reserve’s rate-setting Federal Open Market Committee voted unanimously to maintain the benchmark interest rate within a range of 4.25 to 4.5 percent and characterized activity in the housing sector as stable since mid-2024.

“If it was a buyers’ market, we might see less demand to rent as buyers move out of rented homes and apartments, but with inflation and relatively high interest rates, renters are likely to retain their units, especially in the best markets,” Hill said.

Some experts believe 2025 is shaping up to be anything but a renter’s market due to a demand for housing that is increasing the cost of rental units in cities such as San Francisco, Seattle, and Portland.

For example, Hill blames a lowered quality of life due to crime and homeless shelter policies that drove staffers to work remotely in secluded areas.

“Those areas had more room for construction, and generally lower rents than prime real estate,” Hill said. “As companies and the federal government want to see their workers in the office, and life in the cities improves as crime is contained, we'll see much stronger demand in traditional popular, high-rent cities.”

President Donald Trump issued a memorandum last month announcing the end of federal remote work arrangements and directing federal employees to return to the office full time.

The Realtor.com report found that rental prices in the New York City metropolitan area are continuing to rise. The median rent is $2,967, and the Regional Plan Association (RPA) estimates that to meet housing demand, the City of New York will need to supply 473,000 new homes by 2032. In Los Angeles, some 456,643 units are needed to meet demand, according to the Los Angeles City Planning Department.

“Rising construction costs, zoning restrictions, and political challenges around affordable housing could prolong the housing shortage in these areas,” Clarke said.

The Realtor.com report further found that rent prices for studio apartments were down 1.3 percent year over year while one- and two-bedroom apartments were down 0.9 percent.

“For a given area of land, you can create more studios than two-bedrooms simply because the studios are smaller and that creates more supply,” Hill said. “If they can’t be filled, prices come down.”