In August, the median asking rent in the U.S. increased by 0.9% year-over-year to $1,645—the largest yearly increase since April 2023. This is according to a recent Redfin report, which showed a 0.1% increase in rent month-over-month.
While the cost of two-bedroom apartments stayed the same at $1,725, the cost of one-bedroom apartments saw a 0.1% annual increase to $1,495. Three-bedroom apartment rentals dropped 1.7% to $2,008. Simpson’s paradox is a statistical phenomena that accounts for the difference between the overall result, which shows a 0.9% rise, and the three separate bedroom counts, which either declined, kept the same, or rose by a smaller amount.
August marked two years since rentals reached their peak, even though they increased by the highest in almost eighteen months. The combination of lower rents and 3.8% annual pay growth indicates an improvement in renting affordability. In 2024, multifamily construction completions are at all-time highs; in many places, supply now exceeds demand. This is causing some building owners to lower their rent and provide potential tenants with incentives.
| Apartments (overall) | $1,700 | $1,645 | -3.2% |
| 0-1 Bedroom Apartments | $1,581 | $1,495 | -5.4% |
| 2 Bedroom Apartments | $1,790 | $1,725 | -3.6% |
| 3+ Bedroom Apartments | $2,024 | $2,008 | -0.8% |
| Median Home Sale Price | $409,000 | $439,000 (July) | +7.3% |
“Almost everything in our lives costs more than it did two years ago—but rents have remained largely stable thanks to the construction boom, especially across the Sun Belt states,” said Sheharyar Bokhari, Senior Economist at Redfin. “We are seeing rents tick up a little now that new construction is starting to slow down, but asking rents are likely to stay relatively flat for some time due to the backlog of new apartments that are still coming onto the market.”
The most pronounced example of the downward trend in rentals due to increased building is Austin, Texas, where the median asking rent had the biggest reduction in August, falling 17.6% year-over-year among the 33 major metros that Redfin surveyed. That indicates that, in terms of money, Austin rents are $317 less per month than they were a year ago.
In an effort to meet the country’s highest demand during the pandemic, officials in the nation’s capital of Texas approved the largest amount of new building. Although demand has finally leveled off, asking rents are still declining because many new flats are still being built.
August saw double-digit drops in asking rent in San Diego (-13.3%) and Jacksonville, FL (-13%), with San Francisco (-7.8%) and Tampa, FL (-5.8%) rounding out the five metro areas with the biggest drops.
The largest increase among the metro areas Redfin examined was seen in August, when the median asking rent in Virginia Beach, VA increased by 15.2% year-over-year. The next cities with the biggest growth were Cincinnati (up 9.4%), Chicago (up 10.8%), Baltimore (up 11.3%), and Washington, D.C. (up 12.2%).
To read the full report, including more data, charts, and methodology, click here.
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