Redfin reports the median U.S. asking rent rose 1.7% ($30) year-over-year to $1,790 in July—the largest increase recorded since January 2023. July marked the second-consecutive year-over-year increase (the median asking rent rose 0.4% in June) following over two years of declining or flat rents. The median asking rent climbed 0.8% on a month-over-month basis in July over the reported June 2025 totals.
“Asking rents may be climbing because shrinking apartment supply is coinciding with growing renter demand, which is being fueled by the high cost of homeownership,” said Redfin Senior Economist Sheharyar Bokhari. “Rents have been sluggish for the past two years because the pandemic building boom created a surplus of supply, which left landlords scrambling to fill vacancies and gave renters negotiating power. But now a slowdown in apartment construction may be shifting the balance of power toward landlords.”
Permits to build multifamily housing have fallen 23.1% since the pandemic construction boom as sluggish rents and high borrowing costs for builders have made building less attractive.
Owners of multifamily units have resorted to offering renter concessions to attract or retain tenants, thus reducing the cost of renting a property for a specific period, including free rent for a month, reduced rent, waived fees (like application or pet fees), or even free amenities, for example.
Apartments.com recently examined the tactics landlords are using to attract renters in today’s marketplace. With affordability still top of mind for many, incentives like a free month of rent are emerging as leverage for property owners seeking to house tenants. The study found that 36% of renters said a free first month or rent would be the strongest factor to signing a lease when choosing between comparable apartments.
With the strength of concessions as a driver for landlords, the Apartments.com survey found that 88% of renters said they would consider overlooking minor flaws in an apartment for a good rent concession, while nearly a third of renters value a rent concession that provides ongoing value throughout the term of their lease, and 95% of renters said a concession mentioned in a listing would make them more likely or potentially more likely to inquire about the property.
And while renters may be enjoying success asking for such concessions, those perks could dry up as the apartment supply begins to shrink.
With the median asking rent ticking upward, it’s worth noting that it remains $70 below the July 2022 record high of $1,860. Wages are also growing faster than asking rents, indicating that rental affordability is actually improving.
Targeting the Biggest Increases/Decreases
In San Jose, California, the median asking rent rose 8.8% year-over-year in July to $3,569—the biggest increase and the highest level among the 43 major core-based statistical areas (CBSAs) Redfin analyzed. Chicago, Illinois reported the second-biggest increase (8.6%), followed by Washington, D.C. (8.5%); Pittsburgh, Pennsylvania (7.7%); and Philadelphia, Pennsylvania (7.5%). Some of these metros may be seeing rents jump because new supply has been shrinking. Permits to build apartments in San Jose have fallen 74.5% since the pandemic—the second biggest decline among the 78 metros analyzed in a separate report. Philadelphia posted the fifth-largest decline in permits, down 62.1%.
Only seven of the metros Redfin analyzed in this report saw asking rents fall, led by Florida and Texas. Jacksonville, Florida reported the biggest decline at (-3.5%), followed by Austin, Texas (-2.6%); Louisville, Kentucky (-2.4%); Cincinnati, Ohio (-1.7%); Phoenix, Arizona (-1.1%); Cleveland, Ohio (-1%); and Orlando, Florida (-0.2%).
Asking Rents Falling Fastest for Two-Bedroom Apartments
The median asking rent for 0-1 bedroom apartments rose 3.4% year-over-year to $1,650 in July—the biggest increase since September 2022. For two-bedroom apartments, it increased 1.7% to $1,907—the largest jump since November 2022. And for three and more bedroom apartments, it fell 1.5% to $2,192—the lowest level for this time of year since 2021.
Permitting trends across large metro areas show that some markets are already feeling the effects from higher construction costs and compressed profits:
- Orlando, Florida: Permits for multifamily units dropped -54.9% from Q1 to Q2 2025—the first Q2 decline since 2022.
- Philadelphia, Pennsylvania and San Antonio, Texas also saw their first Q2 permitting dips in three years.
- Charlotte, North Carolina and Las Vegas, Nevada experienced their largest quarterly permitting declines in Q2 since 2022.
- San Francisco, California, which saw a modest increase, posted its slowest Q2 growth in permitting in three years.
These local slowdowns suggest that developers are responding to worsening conditions by reducing plans for new projects—an early warning sign that the supply of new rental units could tighten over time. Looking ahead, the doubled tariffs on imported steel and aluminum announced in June could make this condition worse.
Recent data from the National Association of Home Builders (NAHB) found that in Q2, confidence in the market for new multifamily housing increased year-over-year in the second quarter. NAHB’s Q2 Multifamily Production Index (MPI) had a reading of 46, up two points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 82, up one point year-over-year.
“Multifamily developer confidence and sentiment are showing slight signs of improvement when compared to this time last year,” said Debra Guerrero, SVP of Strategic Partnerships and Government Affairs at The NRP Group in San Antonio and Chair of NAHB’s Multifamily Council. “High interest rates, rising construction costs, limited land availability and restrictive local regulations are still significant issues in certain parts of the country. But confidence in subsidized affordable housing has shown considerable improvement in this survey, due in part to optimism surrounding the expansion of federal affordable housing resources flowing from the recent congressional reconciliation bill.”
Click here for more on Redfin’s rental report for July 2025.
The post Costs on the Rise: Asking Rents Reach 30-Month High first appeared on The MortgagePoint.
