Rents declined across most major U.S. metro areas in May, marking the largest year-over-year drop in two years as rising supply outpaced demand, according to new data from Redfin. Out of 44 major core-based statistical areas analyzed, 28 recorded annual rent decreases, the highest count since September 2023. The national median asking rent fell 1% year-over-year to $1,633 in May, still below the peak of $1,705 set in August 2022.
On a monthly basis, rents increased 0.5% in May, a typical growth rate for the spring leasing season. “Apartment construction in America has been hovering near a 50-year high, and even though renter demand is strong, it’s not keeping pace with supply,” noted Redfin Senior Economist. “Many units are sitting vacant for months, which means renters have power to negotiate concessions and landlords have less leeway to keep rents high.”
Vacancy rates for multifamily buildings with five or more units stood at 8.2% in the first quarter of 2025, matching the prior quarter for the highest level since early 2021. Redfin’s report suggested that while rent declines are prevalent now, a future rebound remains possible as the surge in multifamily construction begins to decelerate, though construction activity remains historically elevated.
Despite the slowdown in rental growth, the increase in housing supply has offered some relief to renters. Data from Realtor showed that in April, renters earning the median household income allocated 23.4% of their income toward rent, down from 24.7% a year earlier and well below the commonly used 30% affordability threshold.
“Even in unaffordable markets, we saw improvement in April,” said Realtor Chief Economist Danielle Hale. “Generally small but steady rent declines have chipped away at rental costs for nearly 3 years, and income growth has boosted household buying power.” However, she added that rents remain approximately 20% higher than pre-pandemic levels, and financial concerns persist among many consumers regarding job security and broader economic stability.
Regionally, Austin, Texas, experienced the steepest year-over-year decline in median asking rents at 8.8% in May. Other cities that saw notable declines included Minneapolis, Minnesota (-6.3%), Columbus, Ohio (-3.5%), Nashville, Tennessee (-3.4%), and Portland, Oregon (-3.4%). Conversely, some markets still reported rent increases. Cincinnati, Ohio, led with a 7.4% year-over-year rise in May.
It was followed by Tampa, Florida (+4.2%), St. Louis, Missouri (+4%), Pittsburgh, Pennsylvania (+3.5%), and Birmingham, Alabama (+2.4%). The current rental landscape continues to impact apartment-focused real estate investment trusts, including Equity Residential, Independence Realty, AvalonBay Communities, Camden Property, Mid-America Apartment Communities, Veris Residential, and UDR. – By MENA Newswire News Desk.