The U.S. rental market continues to experience shifts as increasing housing supply drives rents downward. By next fall, rental stock is projected to rise by 1.1%, surpassing 49 million units, with the South and West leading the growth.
October Rent Trends
Median rents fell to $1,720 in October, marking a 0.8% decline and the fifteenth consecutive month of year-over-year decreases, according to Realtor.com’s October Rental Report. Smaller units, such as studios, saw the most significant price drops.
Danielle Hale, chief economist at Realtor.com, attributes these changes to an influx of new multifamily housing:
“New multifamily construction projects initiated over the last two years have begun entering the market, softening rents and offering renters some relief. While fewer projects are expected to complete in 2025, enough units will come online to maintain downward pressure on rents.”
Increased Rental Supply in 2024 and Beyond
The growing supply of rental housing stems from record-breaking multifamily completions in 2024. Between January and September, completions averaged 606,000 units annually—up from 445,000 units during the same period in 2023 and well above the pre-pandemic average of 359,000 units.
Although fewer completions are anticipated in 2025, rental stock is still expected to grow by 1.1%, reaching 49 million units—6.7% higher than in 2019.
Regional Insights: The South and West Dominate Growth
Rental stock expansion has been most pronounced in the South and West, regions experiencing significant increases in multifamily completions:
South: Up 49.1% year-over-year, with Memphis (-5.4%) and Nashville (-5.2%) showing the steepest rent declines.
West: Up 23.9% year-over-year, with notable decreases in Denver (-5.6%) and Phoenix (-4.5%).
Midwest: Up 44.9%, with Chicago (-4.1%) leading declines.
Northeast: The slowest growth (7.4%) has led to smaller rent changes, such as a slight increase in New York City (+0.4%).
By fall 2025, the South will lead rental stock growth (+1.5%), followed by the West (+1.2%), Midwest (+0.9%), and Northeast (+0.7%).
Rents Fall Across Unit Sizes
October saw rent declines across all property sizes:
Studios: Down 1.2% to $1,436, a 3.6% drop from their October 2022 peak but 12.5% higher than five years ago.
One-bedroom units: Down 0.9% to $1,600, 17.1% higher than five years ago.
Two-bedroom units: Down 0.7% to $1,908, a 21.1% increase over the past five years.
Despite recent declines, rents remain $272 (18.8%) higher than pre-pandemic levels in 2019.
Looking Ahead
As more multifamily projects are completed, renters can anticipate continued relief in 2025. However, regional differences may influence the extent of rent decreases, with the South and West expected to see the most significant impacts.
Methodology
This analysis is based on October 2024 rental data for studio, one-bedroom, and two-bedroom units listed on Realtor.com. The data includes apartments, condos, townhomes, and single-family homes in the 50 largest U.S. metro areas. Rental trends have been tracked by Realtor.com since March 2019, with monthly reporting beginning in October 2020.
