Renters make affordability gains for the first time in four years
Key Takeaways:
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- Rent Growth Stalls: The typical U.S. rent held steady at $2,007 from July to August. Rents are up 2.4% from a year ago.
- Affordability Showing First Improvement Since 2021: Incomes rise as rent growth stalls. A renter looking to move into the typical rental would now spend 28.9% of their household income on rent, which is the first time renter affordability has fallen to this level since October 2021.
- Rental Concessions Set Another Record: 36.7% of rental listings on Zillow offered a concession in August, marking a new high.
The typical U.S. asking rent held steady at $2,007 from July to August. The pace of rent growth was unusually low for any August on record. While summer is usually the most competitive time in the rental market, rent growth has remained unseasonably cool this year given the influx of new rental housing and the prevailing economic slowdown that is holding back residential mobility.
Nationally, rents are now 2.4% higher than a year ago, but the number of markets where rents remain flat is growing. Annual rent increases in August were imperceptible in Raleigh, Las Vegas, Nashville, Orlando, Houston and Dallas; while rents continued to fall in Phoenix, San Antonio, Denver, and Austin.
Slowing rent growth has finally given incomes a chance to catch up, leading to the first improvement in renter affordability since October 2021. In August, the median income household moving into a new rental would have to spend 28.9% of their income to comfortably afford the typical rent, which falls solidly within the recommended guidance that renters spend no more than 30% of income on rent. Meanwhile, in 41 of the 50 largest markets, renters could spend even less of their income on rent. In Minneapolis, Salt Lake City, and Austin, the typical rent requires less than 20% of the median household income.
Though rent growth is tapering off, prices remain high. Each of the 50 largest markets requires a renter’s income to be above $50,000 – from Louisville at $54,640 to New York at $143,467 – in order to meet that 30% rent-to-income ratio threshold. Nationally, the income needed to afford rent has increased by 34.9% since before the pandemic.
As rent growth continued to soften, rental concessions continued to rise. In total, 36.7% of rental listings on Zillow now offer a concession. Where concessions and rent growth head from here will ultimately depend on what happens next with economic mobility and housing supply. However, historical trends tell us that the rental market tends to cool along with temperatures, meaning rental housing providers may be in for a long winter this year.
August 2025 Rental Market Report
Rents
- The typical asking rent is $2,007 in August, unchanged from July. The pre-pandemic average month-over-month change for this time of year is 0.2%.
- Since the beginning of the pandemic, rents have increased by 36.2%.
- Rents are now 2.4% up from last year.
- Rents fell, on a monthly basis, in 20 major metro areas. The largest monthly drops are in Austin (-0.9%), Providence (-0.5%), Denver (-0.4%), San Antonio (-0.4%), and Boston (-0.4%).
- Rents are up from year-ago levels in 46 of the 50 largest metro areas. Annual rent increases are highest in Chicago (6.1%), San Francisco (5.1%), New York (5%), Providence (4.6%), and Kansas City (4.6%).
Single-Family Rents
- The typical asking rent for single-family homes is $2,292 in August, up 0.1% month-over-month. Since the beginning of the pandemic, single-family rents have increased by 44%.
- Single-family rents are now up 3.2% from last year.
- Single-family rents fell, on a monthly basis, in 16 major metro areas. The largest monthly drops in single-family rents are in Providence (-1%), Buffalo (-0.9%), Austin (-0.6%), Dallas (-0.3%), and Salt Lake City (-0.3%).
- Single-family rents are up from year-ago levels in 49 of the 50 largest metro areas. Annual single-family rent increases are highest in Indianapolis (5.9%), Chicago (5.8%), Providence (5.8%), Pittsburgh (5.6%), and Birmingham (5.6%).
Multifamily Rents
- The typical asking rent for multifamily homes is $1,836 in August, down 0.1% month-over-month. Since the beginning of the pandemic, multifamily rents have increased by 28.4%.
- Multifamily rents are now up 1.8% from last year.
- Multifamily rents fell, on a monthly basis, in 30 major metro areas. The largest monthly drops in multifamily rents are in Austin (-0.9%), New Orleans (-0.6%), Tampa (-0.5%), Denver (-0.5%), and San Antonio (-0.4%).
- Multifamily rents are up from year-ago levels in 39 of the 50 largest metro areas. Annual multifamily rent increases are highest in Chicago (6%), San Francisco (5.1%), New York (5%), Providence (4.5%), and Hartford (4.1%).
Rent Concessions
- 36.7% of rentals on Zillow offered concessions in August.
- The share of rental listings offering concessions increased by 0.7ppts month-over-month in August.
- The share of rental listings offering concessions increased by 2.4ppts from last year.
- The share of rentals with concessions is lower, on a monthly basis, in 7 major metro areas. The largest monthly drops in the share of rentals with concessions are in Cincinnati (-1.8ppts), Los Angeles (-1.3ppts), Providence (-1.2ppts), Jacksonville (-1.2ppts), and Buffalo (-1ppts).
- The share of rentals with concessions is higher, on a monthly basis, in 43 major metro areas. The largest monthly increases in the share of rentals with concessions are in Birmingham (7.4ppts), Las Vegas (4.4ppts), Columbus (3.8ppts), Boston (3.4ppts), and Richmond (3.3ppts).
- Rent concessions are up from year-ago levels in 38 of the 50 largest metro areas. The annual increase in share of rental listings with concessions is highest in Denver (13.6ppts), Memphis (12.9ppts), Orlando (11.4ppts), Houston (10.6ppts), and Austin (9.5ppts).
Rent Affordability
- The median household would spend 28.9% of their income on a new rental in August.
- Rent affordability decreased by 0.1ppts month-over-month in August. The pre-pandemic share of median household income spent on rent was 27.2%.
- Rent affordability is now 0.3ppts down from last year.
- The most affordable metro areas for rents are Austin (18.7%), Salt Lake City (19.8%), Minneapolis (20.0%), Raleigh (20.1%), and St. Louis (20.4%).
- The least affordable metro areas for rents are New York (41.6%), Miami (39.0%), Los Angeles (35.8%), San Diego (32.5%), and Riverside (32.0%).
- The income needed to afford rent increased by 2.7% year-over-year in August to $80,291. Since pre-pandemic, the income needed to afford rent has increased by 34.9%