Rent Growth Slows, Landlords Offer Record Concessions in September

National rent growth for multifamily units eased to 1.7 percent year-over-year in September, creating more favorable conditions for renters as landlords increasingly offer incentives, according to the latest data.

A record 37.3 percent of rentals listed on Zillow now feature concessions like free months of rent or complimentary parking, a significant jump from 14.4 percent in 2019. This shift comes as builders have ramped up construction of multifamily units, with 2024 seeing the most completions in half a century, particularly in the South where fewer zoning restrictions allowed for faster development. “Markets that built more, and faster, are seeing that investment pay off with more renters able to comfortably afford an apartment,” said Orphe Divounguy, senior economist at Zillow. “It’s a reminder that housing costs can be tamed when policy allows supply to keep up with demand.”

Rent affordability improved in 38 of the 50 largest U.S. metros over the past year, with the biggest gains seen in Denver, Austin, Miami, San Antonio, and Phoenix. Apartment rents are falling fastest year-over-year in Austin (-4.7 percent), Denver (-3.4 percent), San Antonio (-2.3 percent), Phoenix (-2.2 percent), and Orlando (-0.8 percent). However, areas with stricter building regulations, like those discussed in reports from the U.S. Department of Housing and Urban Development, continue to see higher rent growth; Chicago leads with 6 percent, followed by San Francisco (5.6 percent) and New York (5.3 percent). This trend impacts millions of Americans who rely on rental housing, potentially easing financial strain for many households.

Even single-family rentals, which have previously outperformed apartments, are experiencing slower growth, with a 3.2 percent year-over-year increase – the smallest since Zillow began tracking this data in 2016. Experts anticipate the trend of rental concessions will continue to rise, peaking in winter or early spring, and property managers may need to consider price cuts as competition decreases. A weaker labor market is also contributing to the slowdown, as job growth influences residential mobility, as detailed in recent Bureau of Labor Statistics reports.

Officials expect the concessions trend to continue as the rental market cools during the winter months.