Nationwide Rent Prices Stabilize as Growth Slows to Lowest Rate Since 2020
The Corcoran Group broker Noble Black joins Varney & Co. to discuss homebuilder confidence, mortgage rates, and Congress actions to address the housing crisis.
Renters are expected to experience some relief from rising prices this year, as the pace of rent growth is projected to slow. This stabilization in the market coincides with a measure of affordability reaching a four-year high.
According to an analysis by Zillow, multifamily rental prices are anticipated to remain relatively flat through the end of 2026, with a slight decline of 0.2%. In contrast, single-family rents are expected to rise at an annual rate of 1.1% by December 2026. This marks a significant slowdown from the rapid increases seen in recent years, as higher vacancy rates and an influx of newly-built apartments contribute to subdued rent growth, improving renters’ bargaining positions. Notably, single-family rents were up 2.7% last month compared to the previous year.
Zillow’s data indicates that the typical asking rent in January was $1,895, reflecting a mere 0.1% increase from December and a 2% rise year-over-year. This represents the slowest annual rent growth since December 2020, as the market steadies after experiencing rapid price hikes during the pandemic.
TEXAS CAPITAL’S HOUSEHOLD GROWTH SURGES, FAR OUTPACING NATIONAL RATE
Rent growth has eased over the last year and the trend is expected to continue in 2026, according to an analysis by Zillow. (Michael Nagle/Bloomberg via Getty Images)
Rents for multifamily homes have increased at an even slower pace, rising just 1.4% from a year ago. Zillow’s projection that multifamily rents will decline slightly and remain essentially flat this year suggests that further relief could be on the horizon.
The slowing rent growth has positively impacted an affordability measure that considers renters’ income levels. A median income household now spends 24.3% of its income on typical apartment rent, down from 25% in February 2020.
By another measure, the typical household is allocating 26.4% of its income to rent, the lowest share since August 2021.
US HOME PRICES ARE RISING – BUT THESE FAST-GROWING MARKETS REMAIN AFFORDABLE
Austin, Texas, was one of the most affordable metro areas for renters in Zillow’s analysis. (iStock)
Metro areas where the rent-to-income ratio is significantly higher than the national average include Miami (37.2%), New York City (36.9%), and Los Angeles (34%).
Conversely, notable metros with better affordability include St. Louis (19.7%), Minneapolis (19.4%), Denver (19.4%), Austin (17.9%), and Salt Lake City (17.9%).
“Renters are operating in a very different environment than they were just a few years ago,” stated Orphe Dviounguy, senior economist at Zillow. “When supply expands and vacancies rise, property managers have to adjust on both price and terms. Concessions are near record highs, keeping rent growth modest and creating meaningful opportunities for renters.”
HOUSING MARKET COOLS AS PRICE GROWTH HITS SLOWEST PACE SINCE GREAT RECESSION RECOVERY
Los Angeles is among the metro areas facing affordability challenges for renters. (Patrick T. Fallon/AFP via Getty Images)
Zillow also highlighted that renters are receiving more concessions in lease terms as they leverage their negotiating power in renewals and new leases. The platform found that nearly 40% of rental listings in January included at least one concession, such as a free month of rent or a reduced deposit.
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This figure is slightly below the record high of 41.1% set last January, yet it remains elevated compared to historical norms.
The Corcoran Group broker Noble Black joins Varney & Co. to discuss homebuilder confidence, mortgage rates, and Congress actions to address the housing crisis.
Renters are expected to experience some relief from rising prices this year, as the pace of rent growth is projected to slow. This stabilization in the market coincides with a measure of affordability reaching a four-year high.
According to an analysis by Zillow, multifamily rental prices are anticipated to remain relatively flat through the end of 2026, with a slight decline of 0.2%. In contrast, single-family rents are expected to rise at an annual rate of 1.1% by December 2026. This marks a significant slowdown from the rapid increases seen in recent years, as higher vacancy rates and an influx of newly-built apartments contribute to subdued rent growth, improving renters’ bargaining positions. Notably, single-family rents were up 2.7% last month compared to the previous year.
Zillow’s data indicates that the typical asking rent in January was $1,895, reflecting a mere 0.1% increase from December and a 2% rise year-over-year. This represents the slowest annual rent growth since December 2020, as the market steadies after experiencing rapid price hikes during the pandemic.
TEXAS CAPITAL’S HOUSEHOLD GROWTH SURGES, FAR OUTPACING NATIONAL RATE
Rent growth has eased over the last year and the trend is expected to continue in 2026, according to an analysis by Zillow. (Michael Nagle/Bloomberg via Getty Images)
Rents for multifamily homes have increased at an even slower pace, rising just 1.4% from a year ago. Zillow’s projection that multifamily rents will decline slightly and remain essentially flat this year suggests that further relief could be on the horizon.
The slowing rent growth has positively impacted an affordability measure that considers renters’ income levels. A median income household now spends 24.3% of its income on typical apartment rent, down from 25% in February 2020.
By another measure, the typical household is allocating 26.4% of its income to rent, the lowest share since August 2021.
US HOME PRICES ARE RISING – BUT THESE FAST-GROWING MARKETS REMAIN AFFORDABLE
Austin, Texas, was one of the most affordable metro areas for renters in Zillow’s analysis. (iStock)
Metro areas where the rent-to-income ratio is significantly higher than the national average include Miami (37.2%), New York City (36.9%), and Los Angeles (34%).
Conversely, notable metros with better affordability include St. Louis (19.7%), Minneapolis (19.4%), Denver (19.4%), Austin (17.9%), and Salt Lake City (17.9%).
“Renters are operating in a very different environment than they were just a few years ago,” stated Orphe Dviounguy, senior economist at Zillow. “When supply expands and vacancies rise, property managers have to adjust on both price and terms. Concessions are near record highs, keeping rent growth modest and creating meaningful opportunities for renters.”
HOUSING MARKET COOLS AS PRICE GROWTH HITS SLOWEST PACE SINCE GREAT RECESSION RECOVERY
Los Angeles is among the metro areas facing affordability challenges for renters. (Patrick T. Fallon/AFP via Getty Images)
Zillow also highlighted that renters are receiving more concessions in lease terms as they leverage their negotiating power in renewals and new leases. The platform found that nearly 40% of rental listings in January included at least one concession, such as a free month of rent or a reduced deposit.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
This figure is slightly below the record high of 41.1% set last January, yet it remains elevated compared to historical norms.
