The rental market is telling an interesting story right now. Despite being in peak moving season, rents are staying flat and vacancy rates are hitting record highs. If you’re a renter looking for your next home or a property owner trying to understand market dynamics, here’s what the latest data reveals about where the rental market is headed.
Get a Free Virtual Rental Evaluation Plus a Custom Cost Quote
The Big Picture: Rents Hold Steady at $1,402
The national median rent remained unchanged in July, sitting at $1,402 per month. While this might sound like good news for renters, the real story is more complex. Rent prices are actually down 0.8% compared to last year – a trend that’s been building for three consecutive months.
This is particularly noteworthy because summer is typically when rents surge due to increased moving activity. The fact that we’re seeing stagnant growth during what should be the busiest rental season suggests the market is softer than usual.
What This Means in Real Numbers
To put these changes in perspective, today’s median rent is $11 less than it was in July 2024. While that might not seem dramatic, it represents a shift from the explosive rent growth we saw in recent years. In fact, rents have now fallen 2.8% below their August 2022 peak – a decline of about $40 per month.
However, it’s important to remember that rents are still 22% higher than they were in January 2021, reflecting the significant increases that occurred during the post-pandemic boom.
Record-High Vacancies: A Landlord’s Challenge
One of the most striking developments is the vacancy rate, which hit 7.1% in July – the highest level since tracking began in 2017. This surge in empty units is largely the result of a historic construction boom that brought over 600,000 new multifamily units to market in 2024 alone.
The Supply Story
This represents a 65% increase in new supply compared to 2022 and marks the most new apartments built in a single year since 1986. While the construction wave has peaked, the market is still working through this massive influx of new housing options.
For renters, this means more choices and potentially better deals. For landlords, it means increased competition and less pricing power.
How Long Are Units Sitting Empty?
Another telling indicator is how long it takes to lease a vacant unit. Currently, apartments are taking an average of 28 days to get leased after being listed – up from 27 days last month. While this is still well below the 37-day peak we saw in January, it’s a sign that the market remains competitive for landlords.
Units are currently sitting two days longer than they were at this time last year, and a full ten days longer than during the tight market conditions of July 2021.
Regional Variations: Not All Markets Are the Same
While national trends tell one story, regional markets are experiencing vastly different conditions.
The Struggling Sun Belt
Austin leads the pack for rent declines, with median rents down 6.8% over the past year and a staggering 18% below their 2022 peak. This dramatic shift coincides with Austin being the fastest-permitting metro for new homes in the country.
Other Sun Belt markets experiencing significant rent declines include:
The common thread? These markets have all seen substantial new construction activity, demonstrating how increased supply can quickly cool previously hot markets.
The Bay Area Bounces Back
On the opposite end of the spectrum, San Francisco is experiencing the nation’s fastest rent growth at 4.6% year-over-year. Within the city of San Francisco proper, rents have spiked 10.6% over the past year.
This growth is particularly notable because Bay Area rents are only now returning to their early-2020 levels, making this a recovery story rather than new peak pricing.
Midwest and Northeast Momentum
Beyond the Bay Area, the fastest rent growth is happening in Midwest markets like Chicago and Minneapolis, along with Northeast cities including Providence and Hartford. These markets are benefiting from increased demand without the supply surge affecting Sun Belt cities.
What’s Driving These Changes?
Several factors are converging to create the current market dynamics:
Supply Surge Impact: The massive increase in new apartment construction has fundamentally shifted the supply-demand balance, giving renters more options and reducing landlords’ pricing power.
Economic Uncertainty: Broader macroeconomic concerns appear to be dampening demand during what should be peak moving season. Policy uncertainties and economic headwinds may be making consumers more cautious about major moves.
Seasonal Anomaly: The fact that rent growth is slowing during peak moving season, rather than accelerating as it typically does, suggests underlying market softness.
What This Means for You
If You’re a Renter
This could be an opportune time to search for a new apartment. With higher vacancy rates and more options available, you may have increased negotiating power. Consider:
If You’re a Landlord
The data suggests you’ll need to be more competitive to attract and retain tenants:
Ready to Get Your Rental on the MoveZen System?
Our ultimate goal is to maximize your bottom line income while minimizing headaches. This starts with our new owner onboard process
Thinking of Switching Property Management Companies?
Don’t let the unpleasant task of working with your current manager to close out your account hold you back, we’ll do it all. Just notify them once in writing, and we’ll do the rest
Looking Ahead
While the current market favors renters, this situation isn’t expected to last indefinitely. Construction activity is slowing, and the massive supply wave that created current conditions is beginning to recede. However, the timeline for market tightening remains uncertain, particularly given ongoing economic headwinds.
The rental market is in a period of adjustment following years of rapid change. For both renters and landlords, understanding these trends can help inform better decisions in the months ahead.
To read more on this topic, visit Apartment List National Rent Report.
