US Rent Declines in January Year-on-Year for 18th Straight Month

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

Rents across U.S. metros fell in January from a year ago but remain higher than pre-pandemic levels, according to the real estate listings website Realtor.

“In the first month of 2025, the median asking rent across the 50 largest U.S. metropolitan areas picked up slightly to $1,703, from $1,695 in December 2024, but it remains down 0.2% from one year ago,” the company said in a Feb. 18 report. “This marks the 18th consecutive month in which rents have fallen year over year.”

While January rents were lower than in the same month of 2024 and 2023, they are $257 (16.1 percent) higher than in January 2020.

“Rents remain significantly higher than they were before the COVID-19 pandemic for units of all sizes, but studio rents have grown the least over the past five years despite being flat over the past year,” the report said.

According to real estate brokerage Redfin, rents had skyrocketed during the pandemic “moving frenzy” as there weren’t enough apartments to meet the demand. Rents dipped in 2023 and early 2024 as builders boosted construction to take advantage of the demand in the market.

The number of new apartments entering the market is now waning. While demand remains strong, it isn’t as high as during the pandemic.

“Rental supply and demand are in lockstep, which is keeping rent growth at bay, but that may not last long,” Redfin senior economist Sheharyar Bokhari said. “Apartment construction could be further hampered by new tariffs on building materials. At the same time, demand for apartments continues to grow as high mortgage rates and housing prices push homeownership out of reach for many Americans. Rents will tick up if demand starts to outpace supply in a meaningful way.”

Renting Versus Buying

The Realtor report found that it was less expensive to rent a median 0–2 bedroom unit than to buy a median home on a monthly cost basis in 48 out of the 50 tracked metros in January.

The two markets that bucked the trend, Pittsburgh and Detroit, are places with the lowest median home sales listing price out of the 50 metros. Median homes in Pittsburgh had a listing price of $229,700, with Detroit at $239,950.

Realtor attributed the shift of the housing market toward a “more renter-friendly direction” partly to persistently high mortgage rates.

The average weekly rate on a 30-year fixed-rate mortgage has remained above the 6 percent level for more than two years, according to Freddie Mac data. The rate has been hovering around the 7 percent level for the past month.

According to a December 2024 statement by real estate company CBRE, average monthly mortgage payments for new homes were around 35 percent higher than rents for apartments, making renting a more attractive option for many Americans.

“The difference between mortgage payments and rental costs poses a substantial challenge for individuals and families trying to transition from renting to homeownership,” Matt Vance, a senior economist at real estate company CBRE, said in a statement. “Many are finding that renting not only offers financial advantages, but also provides the flexibility and lifestyle benefits they value, allowing them to adapt to changing circumstances and priorities.”

The median U.S. home sale price is at $419,000, with 19 months of year-over-year gains. Mortgage rates are at around 7 percent, and the Fed didn’t cut interest rates last month due to concerns over inflation.

“Waiting for rates to fall leaves you at risk of increased competition among buyers and subsequent price hikes from sellers,” Redfin said. “Rates are lower than they were a year ago and sales are still sluggish but improving, so now may be the time to act. Rates will likely remain steady for the foreseeable future, but buyers are getting restless, helping the market gain momentum. The longer you wait, the more competition you’ll see.”