Rents decreased again in October, falling -0.8%, or $14, to $1,720. This marks the 15th consecutive month of year-over-year drops, with smaller-sized units seeing the biggest declines, according to Realtor.com.
October’s year-over-year median asking rent is just $40, or -2.3%, lower than its August 2022 peak and is $272, or 18.8%, higher than the same period in 2019.
All unit sizes saw drops in October. The median rent for studios decreased -1.2% year over year to $1,436, down -3.6% from its October 2022 peak but 12.5% higher than five years ago. The median rent for one-bedrooms dropped -0.9% to $1,600, which is 17.1% higher than in 2019, while the annual median rent for two-bedrooms fell -0.7% to $1,908, 21.1% higher than five years ago.
Looking ahead, the continued influx of multifamily communities coming online is expected to put continued downward pressure on rents in 2025.
“New multifamily construction projects started in the last two years have hit the market in 2024, with a greater supply of units helping to soften rents and bring renters some relief,” said Realtor.com chief economist Danielle Hale. “While we expect fewer multifamily homes to be finished in 2025, we still anticipate enough to increase supply, which will keep downward pressure on rents.”
According to Realtor.com, between January and September, the average seasonally adjusted annual rate of multifamily completions hit 606,000 units, up from 445,000 during the same period in 2023 and much higher than the 2017 to 2019 average of 359,000 units. Even though a lower rate of completions is expected for 2025, rental housing stock is slated to grow by 1.1% to over 49 million units by next fall.
The biggest year-over-year gains in completions this year have been seen in the South, 49.1%, followed by the Midwest, 44.9%; the West, 23.9%; and the Northeast, 7.4%. The rental stock increases have translated to lower median asking rents. In October, the biggest year-over-year drops were in Memphis and Nashville, Tennessee, at -5.4% and -5.2%, respectively. The biggest annual decline in the Midwest was in Chicago at -4.1%, while the Western markets of Denver and Phoenix saw drops of -5.6% and -4.5%, respectively. In the Northeast, large metros, such as New York, have seen small year-over-year rent increases due to slower supply increases.
By fall 2025, the nation’s rental stock is expected to increase the most in the South, with a 1.5% year-over-year bump, followed by the West, 1.2%; the Midwest, 0.9%; and the Northeast, 0.7%, according to Realtor.com.
