According to a new Redfin study, the median asking rent in the U.S. dropped 0.5% year-over-year (YoY) to $1,642 in June, marking the fourth consecutive month of yearly decreases. Overall, asking rents increased by an estimated 0.6% month-over-month (MoM).
The median asking rent is only $63 below the all-time high of $1,705 set in August 2022, despite being lower than it was a year ago. For the past year or so, rents have generally been quite stable, with yearly decreases or rises of 1% or less since March 2024. This comes after significant fluctuations during the pandemic era, when the median asking rent rose by up to 18% annually and fell by up to 4% annually.
Because there is a greater supply of apartments than demand, even though many Americans choose to rent rather than buy due to the high cost of homeownership, rents have decreased somewhat but consistently over the past few months.
There are many empty apartments since apartment construction in the US is close to a 50-year high. Less than half of newly constructed apartments finished by the end of 2024 were rented within three months, according to a recent Redfin analysis. The good news is, renters can now bargain with landlords because of this.
“Renters have the upper hand—at least for now—because there are a near-record number of apartments coming on the market that landlords are scrambling to lease,” said Sheharyar Bokhari, Senior Economist at Redfin. “In certain parts of the country, renters may be able to negotiate discounted rent, flexible leases or free parking. But these perks may be short-lived given that apartment construction is expected to slow and rental demand is expected to remain strong.”
Apartment Supply Outpaces Demand, Giving Renters More Bargaining Power
With apartment building permits now back to pre-epidemic levels, the multifamily development boom that escalated during the pandemic has begun to slow off.
Of the 44 major core-based statistical areas (CBSAs) that Redfin examined in June, asking rents decreased in 23 of them. The largest drops were in Minneapolis (-5.8% YoY), Austin, Texas (-5.7%), and Las Vegas (-4%). The median asking rent in Austin, Texas, has dropped to $1,379—the lowest level in more than four years.
Even though there is a high demand for apartments in Austin, Redfin agents claim that many residents are opting to rent rather than buy since it is more cost-effective. This is partly due to the particularly robust rise in apartment construction during the pandemic. Between 2021 and 2023, Austin’s builders obtained a significantly higher number of permits than builders in other large metro regions, which caused vacancy rates to skyrocket.
Cincinnati saw the most increase in asking rentals, at 6.2% YoY. Next are Pittsburgh (3.7%) and St. Louis (4.3%), two more Rust Belt metro areas. These metro areas are seeing lower-than-normal apartment building, which could be driving up rents.
In June of this year, the median asking rent for two-bedroom apartments in the U.S. dropped 1.5% YoY to $1,713. Rents for apartments with 0–1 bedrooms and those with 3+ bedrooms were not much different from a year ago. For apartments with 0–1 bedrooms, the median asking rent was $1,499; for apartments with 3+ bedrooms, it was $2,014 a month.
Due to a record number of apartments hitting the market, renting an apartment is becoming more difficult. The fourth quarter saw the completion of about 125,000 new flats, the second-highest total ever, after the previous quarter’s record-breaking total of 142,900.
After being mostly constant over the previous two years, asking rents have lately decreased, indicating that the increased supply has produced a much stronger market for renters.
“Renters are in a relatively rare position where they can finally benefit from market conditions rather than scramble to keep up with them,” Bokhari said. “With more apartments available, renters can afford to be a little more picky about where they want to live and are in a stronger position to negotiate for concessions like flexible lease terms, lower rents or free parking.”
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