According to Zillow’s latest rental market report, subdued rent growth and record-breaking concessions from landlords are creating more favourable conditions for renters.
National rent growth in multifamily units eased to just 1.7 per cent year-over-year in September, the second-lowest annual growth since 2021.
Landlords are increasingly offering incentives to attract tenants, with 37.3 per cent of rentals on Zillow now featuring some form of concession such as free months of rent or free parking.
This marks a record high for September and a significant increase from 14.4 per cent in 2019.
The improved rental landscape comes after builders responded to surging housing demand during the pandemic, completing more multifamily units in 2024 than any year in half a century.
This supply increase has been particularly effective in the South, where fewer zoning restrictions allowed for faster construction.
“Markets that built more, and faster, are seeing that investment pay off with more renters able to comfortably afford an apartment,” Orphe Divounguy, senior economist at Zillow said.
“It’s a reminder that housing costs can be tamed when policy allows supply to keep up with demand.”
Rent affordability improved over the past year in 38 of the 50 largest U.S. metros, with renters in Denver, Austin, Miami, San Antonio and Phoenix seeing the biggest benefits.
Apartment rents are falling fastest year over year in Austin (-4.7 per cent), Denver (-3.4 per cent), San Antonio (-2.3 per cent), Phoenix (-2.2 per cent), and Orlando (-0.8 per cent).
Meanwhile, higher rent growth is concentrated in areas with stricter building regulations and in high-demand, relatively affordable areas.
Chicago leads with 6 per cent growth, followed by San Francisco (5.6 per cent), New York (5.3 per cent), Providence, Rhode Island (4.8 per cent), and Cleveland (4.2 per cent).
Even single-family rentals, which have outperformed apartments in recent years, are experiencing slower growth.
September’s 3.2 per cent year-over-year rise in single-family rent is the smallest annual increase in Zillow records dating back to 2016.
The rental concessions trend is expected to continue rising, as these incentives typically peak in winter or early spring.
As concessions become more common, property managers may need to consider actual price cuts, particularly as rental competition typically decreases during the cooler winter months.
A weaker labour market is also contributing to the slower rent growth this year, as new jobs play an important role in residential mobility.
