Over the past five years, renters have faced significant challenges. Post-pandemic, rents surged dramatically, outpacing wage growth. However, a slight relief has emerged recently: rents are now declining across most of the U.S.
According to Realtor.com, the national median rent for two-bedroom units and smaller fell 1.7% year-over-year in October to $1,696, marking a 3.6% drop from its 2022 peak.
For many renters, lower rents are welcome news and, in some cases, may encourage them to continue renting. Despite falling rents, homeownership costs continue to climb. Mortgage rates above 6%, near-record home prices, and rising "hidden costs" like property taxes, insurance, and maintenance have strained affordability.
An analysis by Zillow and Thumbtack estimates these hidden costs alone now average nearly $16,000 annually—equivalent to an extra $1,325 per month on top of mortgage payments.
Matt Vance, Head of Americas Multifamily Research at CBRE Group Inc, noted, "The leap from renting to buying is exceptionally difficult right now. As a result, we’re seeing higher lease renewal rates among renters."
**Homebuying Premium Remains Elevated** CBRE calculates that the median premium for owning a home versus renting a multifamily unit is currently 108%. This means monthly mortgage payments, taxes, insurance, and maintenance costs are, on average, more than double the cost of renting.
While this premium has dipped slightly from its late-2023 peak, returning to pre-pandemic norms could take years—contingent on lower mortgage rates, declining home prices, rising incomes, and higher rents.
However, with increased apartment construction in recent years, many metro areas are unlikely to see rent hikes soon. Over the past year, cities like Denver, Phoenix, Birmingham (Alabama), and Jacksonville (Florida) have seen rents drop more than 5%, thanks to thousands of new rental units.
In Denver, a construction boom has led landlords to offer concessions, sometimes even cutting rents outright. Over the past year, the "Mile High City" and its suburbs saw rents fall nearly 6%, among the steepest declines nationwide.
Angie Navo, a realtor at Denver-based Smart City Apartments, remarked, "Renters now have plenty of options." She recalled that in her early years, apartments would often be leased immediately after showings—a rarity today.
With longer vacancies, landlords are ramping up incentives. Offers like "12 weeks free rent" are becoming common, up from the previous standard of eight weeks. Some Denver renters who once moved frequently to find the lowest rents are now securing similar concessions upon renewal.
While rent-free weeks effectively lower "net effective rents," Navo noted some buildings are also reducing base rents. For example, a one-bedroom unit in a large Denver complex that once rented for $2,000 at peak now lists around $1,500.
Navo attributes the shift to falling rents, rapid home price appreciation, and economic uncertainty, with fewer clients actively monitoring the housing market or planning purchases. "The enthusiasm for buying just isn’t there," she observed.
Ultimately, the rent-versus-buy decision is complex, rarely based solely on cost. Danielle Hale, Chief Economist at Realtor.com, noted, "For first-time buyers, renting is far more cost-effective in most markets." Still, she highlighted homeownership benefits like fixed payments and long-term stability.
Historically, rents trend upward. Despite recent declines, the national median rent remains 16.9% above 2019 levels. In 2025, rents continue rising in high-demand, supply-constrained cities like New York and San Jose, as well as parts of the Midwest.
**Negotiating Rent: "Why Not Try?"** No major metro has seen steeper rent drops than Austin, Texas, where a post-pandemic construction boom and shifting migration patterns drove a 7.9% decline this year alone.
Sarah Nazarie, who rented a two-bedroom unit near the University of Texas, saw her rent rise from $2,450 to $2,845 between April 2021 and mid-2022. Though she accepted the hike initially, she grew concerned about overpaying by last year.
After an unsuccessful first attempt, Nazarie renegotiated this year—armed with data showing comparable units renting for 19–23% below peak. She proposed $2,200, which her landlord accepted. "Maybe they took pity—I was unemployed at the time," said Nazarie, 33, soon to join a tech firm. "But my flawless payment history likely helped."
Meagan McArthur, 29, and her husband had a similar experience. After moving to Austin in 2022 at peak rents ($1,988/month), they renegotiated when their lease expired 15 months later. Spotting identical units listed for $1,770, McArthur initially proposed matching that rate. When refused, she nearly relocated—until her current unit was relisted at the lower rate, which she then secured without moving.
McArthur, a social media manager, credited her success to market research, persistence, and a solid payment record. "The worst they can say is no," she said. "With high vacancies, leverage shifts to renters."
This year, McArthur and her husband relocated out of state. Their former unit now lists for $1,352.
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