SANTA CLARA, CA — The national median asking rent fell to $1,720 in October, marking the fifteenth consecutive month of year-over-year declines, according to Realtor.com’s October Rental Report. This drop, a modest -0.8%, reflects a continuing trend of declining rents, particularly for smaller rental units, as growing multifamily housing supply eases pressure in the rental market.
New rental properties entering the market have been critical in driving this trend. Construction projects started in the past two years are reaching completion, pushing more units into the market. Danielle Hale, chief economist at Realtor.com, noted how this increase is helping renters. “New multifamily construction projects started in the last two years have hit the market in 2024, with a greater supply of units helping to soften rents and bring renters some relief,” Hale said.
From January to September 2024, the annualized rate of multifamily completions reached 606,000 units, up substantially from the 445,000 units completed during the same period in 2023. While fewer completions are expected in 2025, rental housing stock is still projected to grow by 1.1% by fall 2025, bringing the total to over 49 million units, a 6.7% increase compared to pre-pandemic levels.
Regional Trends Highlight Southern Gains
The South has seen the largest gains in rental housing stock this year, with a 49.1% jump in completions. This expansion has pushed rents lower, making it the region with the steepest declines in October. Memphis, Tenn., saw rents drop 5.4%, while Nashville, Tenn., recorded a 5.2% decline.
Other regions also experienced shifts but at different paces. The Midwest saw completions increase by 44.9%, resulting in rent declines of 4.1% in Chicago. Meanwhile, in the West, completions rose 23.9%, with Denver (-5.6%) and Phoenix (-4.5%) leading rent declines. By contrast, the Northeast has seen slower growth in new rental housing, leading to less pronounced price drops. Some areas, such as New York, even saw a small rise in rents (0.4%).
Looking ahead, the South is expected to continue leading in rental stock growth, with an anticipated 1.5% increase by fall 2025. Other regions, including the West (1.2%), Midwest (0.9%), and Northeast (0.7%), will also see gains, indicating ongoing downward pressure on rents nationwide.
Smaller Units See Largest Price Declines
October rent declines were seen across all unit sizes, with the most significant drops for smaller-sized apartments. Studio rents fell by 1.2% year-over-year to a median of $1,436, a 3.6% decrease from their October 2022 peak. One-bedroom units dropped 0.9%, landing at $1,600, while two-bedroom rents fell 0.7% to $1,908.
Despite these recent decreases, rents remain well above pre-pandemic levels. Studio rents are still 12.5% higher than five years ago, while rents for one- and two-bedroom units have risen 17.1% and 21.1%, respectively, over the same period.
With ongoing additions to rental housing stock, renters can expect some continued relief in pricing into 2025, providing a more balanced and accessible market after years of soaring costs.
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