Redfin reports that 48% of newly built apartments completed in Q1 of 2025 were rented within three months, up slightly from 47% reported Q4 of 2024, and 46% in Q3 of 2024.
For the report, Redfin analyzed the U.S. Census Bureau’s seasonally adjusted absorption rate data for unfurnished, unsubsidized, privately financed rental apartments in buildings with five or more units, dating back to 2012. The most recent data available covers apartments completed in Q1 of 2025, and either rented or not rented within three months of their completion date.
While the recent uptick in the rental absorption rate is small, it’s notable because for much of 2021-2023, the absorption rate was declining, meaning the odds of an apartment getting rented out quickly were declining.
It’s likely inching up now because the number of new apartments hitting the market is falling. That means renters have fewer options to choose from, making it slightly easier for landlords to fill units fast. Roughly 97,000 new apartments were completed in Q1—the lowest seasonally-adjusted level since Q4 of 2023.
As the balance of power tilts back toward landlords and many Americans find themselves priced out of homeownership, rents are beginning to rise again. The median U.S. asking rent jumped 2.6% year over year to $1,790 in August—the largest increase since December 2022.
The odds of an apartment getting rented quickly are lower than they were during and before the pandemic moving frenzy, when the absorption rate was above 50%. While apartment construction has slowed over the past year, completions remain above pre-pandemic levels. Apartment building permits, however, have fallen below pre-pandemic levels, which is likely a sign of what’s to come for completions.
Uptick in Rents
Redfin also reported that the highest gains in asking rents since December 2022 occurred in August, when the median asking rent in the U.S. increased 2.6% ($45) year-over-year to $1,790—only $70 behind the record high set in the summer of 2022, according to the recent research.
After nearly two years of falling or flat rentals, August was the third consecutive month of year-over-year rises. In August 2025, the median asking rent increased by 0.3% month-over-month. Due to cooling supply and strong demand, which is partly caused by high homebuying costs, rents are increasing.
“Apartment construction boomed during the pandemic, but many of those projects have since wrapped up and fewer new ones are breaking ground,” said Sheharyar Bokhari, Senior Economist at Redfin. “Builders are pumping the brakes due to high financing costs, elevated construction expenses and weaker investor appetite. With fewer new apartments coming on the market, renters have fewer options to choose from and landlords are regaining the ability to raise prices.”
Keeping Pace With Market Demands
Redfin also reported that seven in 10 Gen Z and millennial renters are struggling to afford their regular housing payments, as do 41% of homeowners in that age group. The report is based on a survey commissioned by Redfin and conducted by Ipsos in May 2025, examining more than 4,000 U.S. homeowners and renters. The report focuses on the nearly 2,000 respondents who said they struggle to afford housing, broken down by generation and whether they own or rent. Survey respondents were considered to struggle with housing payments if they selected, “I struggle greatly to afford them,” “I regularly struggle, but sometimes okay,” or “I sometimes struggle, but generally okay.”
The study found that baby boomers and Gen Xers are less likely to struggle, but 52% of baby boomer renters, and more than two-thirds of Gen X renters report having a hard time making their regular housing payments.
Of the Gen Z and millennial renters who struggle to afford housing, 40% are eating out at restaurants less often to make their monthly rent payments, making it the most common sacrifice among that group. The next-most common sacrifice is taking no or fewer vacations; nearly one-third of Gen Z and millennial renters selected that option.
Redfin found that 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.
Permits to build multifamily housing meanwhile have fallen 23.1% since the pandemic construction boom as sluggish rents and high borrowing costs for builders have made building less attractive.
A New Era for Rentals?
Apartments.com examined the tactics landlords were using to attract renters, with affordability still top of mind for many. Incentives like a free month of rent were serving 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.
But these concessions may be coming to an end as the rising prices of U.S. homes continues to drive more to the rental market.
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.
Click here for more on Redfin’s examination of recent rental trends.
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