Apartment Rents Fall: January Sees Largest Drop Since 2023

The national median rent in January reached $1,353, marking a 1.4% decrease year-over-year, according to the latest data. This continues a trend of declining rents observed over the past four winters, representing the largest annual drop since September 2023 and the lowest January rent recorded since 2022. Currently, rents are 6.2% below their peak in the summer of 2022.

Rental Market Softens Amidst Increased Supply

A surge in new apartment construction is a key factor contributing to the downward pressure on rents. Landlords are adjusting pricing strategies in response to both increased supply and a consumer base facing economic challenges. The national vacancy rate hit a record high of 7.3% in January, based on Apartment List’s data dating back to 2017.

Did You Know? Units are currently taking an average of 41 days to get leased, four days longer than in January 2025.

Chris Salviati, chief economist at Apartment List, noted that a potential rebound in rent growth early last year “stalled out and reversed course” during a slower summer moving season, a trend that has extended into the winter months. While the peak of new apartment supply is passing, a substantial number of units are still entering the market.

Regional Disparities Emerge

The decline in rents isn’t uniform across the country. The South and Mountain West regions are experiencing the most significant annual decreases. Conversely, the Northeast, Midwest, and parts of the West Coast are still seeing rent increases, despite the broader winter slowdown.

Cities with the Biggest Rent Declines and Increases

Austin, Texas, is currently identified as having the softest rental market, with median rents down 6.3% from the previous year. New Orleans, San Antonio, Tucson, Arizona, and Denver follow closely behind. On the other hand, Virginia Beach, Virginia, is experiencing the fastest rent growth at 5%, followed by San Jose and San Francisco, California; Chicago; and Providence, Rhode Island.

Expert Insight: The current rental market conditions are a complex interplay of supply and demand, heavily influenced by broader economic factors like job market stability and household formation. The waning construction wave suggests a potential shift, but the ultimate direction will depend on whether rental demand can strengthen.

Salviati suggests that future market conditions will hinge on rental demand, which has become “shakier” due to a weakening labor market and overall economic uncertainty.

Frequently Asked Questions

What is the current national median rent?

The national median rent in January was $1,353.

Which cities are experiencing the largest rent decreases?

Austin, Texas, is experiencing the largest rent decreases, with a 6.3% drop from the previous year, followed by New Orleans, San Antonio, Tucson, Arizona, and Denver.

What factors are contributing to the decline in rents?

Increased supply of new apartment units and weaker demand due to a tighter job market and slower household formation are contributing to the decline in rents.

How might changes in the labor market influence rental rates in the coming months?

Apartment Rents Fall: January Sees Largest Drop Since 2023 | CNBC