Landlords may have more leeway to raise rents next year because apartment construction is slowing, which could eventually lead to more renters than vacant units

(NASDAQ: RDFN) — The median U.S. asking rent rose 0.4% year over year to $1,607 in February—the first increase in six months and the biggest in nine months. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. On a month-over-month basis, asking rents climbed 0.6%.

Though asking rents inched up in February, they’ve been relatively flat for the past 10 months compared to the large swings of the past few years. Rents skyrocketed as much as 18% year over year during the pandemic moving frenzy in 2021, and then fell as much as 4% in 2023. Asking rents are now flattening because rental supply and demand are near equilibrium.

“The era of big rent declines is over for most of the country,” said Redfin Senior Economist Sheharyar Bokhari. “A ton of new apartments have hit the market, and demand for those apartments is strong because it’s so expensive to buy a home. But apartment construction is starting to slow, which means there may be more renters than apartments to go around as soon as next year. That could cause rents to tick up and the perks that many renters have grown accustomed to—like free parking—to disappear.”

Asking rents drop most in Austin, rise most in Cincinnati

In Austin, TX, the median asking rent dropped 9.4% year over year in February to $1,404—the largest decline among the 44 major U.S. metropolitan areas Redfin analyzed. It’s now 22% below its August 2023 record high.

Salt Lake City was home to the second largest decline (-7.8%), followed by Jacksonville, FL (-6.7%), Minneapolis (-5.9%) and San Diego (-5.6%).

Asking rents have been falling quickly in parts of Texas and Florida because those states have been building more housing than other states. Florida has also been grappling with intensifying natural disasters, which has made some people hesitant to live there.

Rents rose most in Cincinnati (15.3%), Providence, RI (12.4%), Baltimore (9.6%), Washington, D.C. (9.2%) and Cleveland (8.5%).

Asking rents tick up for smaller apartments, but tick down for larger apartments

The median asking rent for 0-1 bedroom apartments rose 0.4% year over year to $1,467—the first increase since June. The median asking rent for 2 bedroom apartments rose 0.6% to $1,689—also the first increase since June.

The median asking rent for 3+ bedroom apartments fell 0.5% to $1,990, though that was the smallest decline in months.

To view the full report, including charts and methodology, please visit:

https://www.redfin.com/news/rental-tracker-february-2025

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, and title insurance services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.8 billion in commissions. We serve approximately 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

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