At $1,695 in March, the median asking price for rent in the 50 largest metros is now $65 lower than the 2022 peak, according to the Realtor.com March Rent Report. Although rents have been declining for 20 consecutive months, new tariffs could have impacts on areas where permitting activity is growing the fastest. The impact could threaten rent declines.
“While the median asking rent is down $65 monthly or over $700 annually, in nearly every major U.S. metro rents are still considerably higher than 2019. We have seen declines in rents largely due to robust multifamily building and permitting adding more rental options in many metros,” says Joel Berner, senior economist at Realtor.com.
“This tailwind is currently under threat as developers grapple with the short-term and long-term impacts of new and evolving tariffs on building materials. For renters in cities with declining rents, it might be a good time to lock in a good rate for the next year or beyond.”
The tariffs on imported building materials like steel and aluminum could possibly impact the multifamily housing supply by pushing up construction costs. Realtor expects the markets with the highest growth in permits to see the biggest impacts as developers and builders might postpone or cancel new projects.
These markets with the fasting-growing multifamily permits include Milwaukee; Oklahoma City; Memphis, Tennessee; Cleveland; Columbus, Ohio; Atlanta; Cincinnati; Birmingham, Alabama; and San Diego.
“Even markets with declining permitting activity could see impacts as rising construction costs could further dampen new development plans, restricting supply, and continuing to exert upward pressure on rental prices,” adds Berner.
According to the March report, San Francisco remains the only market where the median asking rent is still below pre-pandemic levels. The median rent has climbed 20.2%, from $1,409 in March 2019 to $1,694 last month. In the same period, Pittsburgh (47.9%) led the Northeast in rental growth; Tampa, Florida (45.7%) in the South; Indianapolis (34%) in the Midwest; and Sacramento, California (30.6%) in the West.
