Rent prices dipped a bit more than usual this November, historically a slow month on the rental market calendar. However, signs emerged that market heat may return earlier than we would otherwise expect as we move into 2025. The month-over-month trend in rent prices turned from negative to positive one month ahead of schedule, and the long-running rise in concessions appears to be running out of steam. 

The typical U.S. rent was $1,983 in November, according to Zillow’s Observed Rent Index, up 3.4% from a year ago. Rents fell 0.2% month over month, a slight improvement from the month-over-month change in October. That’s a return to the seasonal trend we came to expect before the pandemic — during the past two years, as the rental market returned to relative normalcy after the red-hot pandemic era, that uptick happened in December. 

The share of rental listings on Zillow offering a concession set a new record at 38.6% in November — the highest share in Zillow data beginning in April 2019. However, the increase from the prior month was only 0.9 percentage points, the smallest since July. 

Reflections on 2024

Renting is being redefined as a long-term solution for more households. Zillow’s Consumer Housing Trends Report shows renters are getting older and are more likely to be parents — both of two-legged and four-legged “children.” 

Why is that? One obvious reason is that the barriers to buying a home have risen over time as the cost has outpaced incomes. Renting is increasingly being seen as an option to achieve that lifestyle — enough space for the whole family, a backyard for the family dog, a community feel — without the same upfront costs. 

Those trends are reflected in the strength of the single-family rental market and in the types of amenities apartment renters are prioritizing. 

What is in store for 2025

As great as it would be to point to one trend or one metric to watch that will provide a clear picture of what renters should expect in 2025, the world is a complex place. It is possible for renters to see the greatest influx of new apartments in 50 years, and still feel an affordability pinch. 

So, what is in store? Thanks in large part to that construction boom, rent growth has been fairly soft this year. That is expected to last into at least the first half of 2025. However, the number of new apartment permits has drawn back dramatically, meaning the heights hit this year are likely to fade into the rearview mirror.

Over the full year, Zillow forecasts single-family rents to grow 4.1%, down from 4.4% year-over-year growth as of November, and multifamily rents to grow 2.8%, up from the current pace of 2.4%. As the number of new apartments hitting the market begins to come back down to earth and competition intensifies, expect fewer concessions to be on offer. 

Rents

• The typical asking rent was $1,983 in November, down 0.2% month over month. Before the pandemic, rents were typically flat this time of year. 
• Rents are now up 3.4% from last year.
• Since the beginning of the pandemic, rents have increased by 33.3%.
• Rents fell, on a monthly basis, in 34 major metro areas. The largest monthly drops were in Denver (-1.2%), Salt Lake City (-0.9%), San Antonio (-0.8%), Austin (-0.7%), and San Jose (-0.6%).
• Rents rose from year-ago levels in 48 of the 50 largest metro areas. Annual rent increases were highest in Hartford (7.6%), Cleveland (7.4%), Providence (6.1%), Buffalo (5.9%), and Chicago (5.7%).

Single-Family Rents

• The typical asking rent for single-family homes is $2,198 in November, up 0.1% month over month. 
• Single-family rents are now up 4.4% from last year.
• Since the beginning of the pandemic, single-family rents have increased by 40.5%.
• Single-family rents fell, on a monthly basis, in 21 major metro areas. The largest monthly drops in single-family rents were in San Jose (-0.7%), Detroit (-0.6%), Minneapolis (-0.6%), Denver (-0.6%), and Nashville (-0.4%).
• Single-family rents rose from year-ago levels in 49 of the 50 largest metro areas. Annual single-family rent increases were highest in St. Louis (7.6%), Cleveland (7.4%), Hartford (7%), Buffalo (6.8%), and Providence (6.8%).

Multifamily Rents

• The typical asking rent for multifamily homes was $1,827 in November, down 0.3% month over month. 
• Multifamily rents are now up 2.4% from last year.
• Since the beginning of the pandemic, multifamily rents have increased by 26.5%.
• Multifamily rents fell, on a monthly basis, in 38 major metro areas. The largest monthly drops in multifamily rents were in Denver (-1.5%), San Antonio (-1.1%), Salt Lake City (-1%), Oklahoma City (-0.9%), and Phoenix (-0.8%).
• Multifamily rents rose from year-ago levels in 42 of the 50 largest metro areas. Annual multifamily rent increases were highest in Hartford (8%), Cleveland (6.8%), Providence (6%), Buffalo (5.8%), and Cincinnati (5.3%).

Rent Concessions

• 38.6% of rentals on Zillow offered concessions in November.
• The share of rental listings offering concessions increased by 0.9 percentage points (ppts) month over month in November.
• The share of rental listings offering concessions increased by 6.7ppts from last year.
• The share of rentals with concessions fell, on a monthly basis, in 15 major metro areas. The largest monthly drops in the share of rentals with concessions were in Cleveland (-3ppts), Columbus (-2.5ppts), Birmingham (-1.6ppts), Charlotte (-1.6ppts), and Providence (-1.5ppts).
• The share of rentals with concessions rose, on a monthly basis, in 34 major metro areas. The largest monthly increases in the share of rentals with concessions were in Richmond (5.8ppts), Virginia Beach (4.5ppts), St. Louis (4.2ppts), Milwaukee (3.9ppts), and Denver (3.8ppts).
• Rent concessions rose from year-ago levels in 43 of the 50 largest metro areas. The annual increase in share of rental listings with concessions was highest in Louisville (20.1ppts), Indianapolis (15ppts), San Antonio (13.7ppts), Denver (13.4ppts), and Jacksonville (12.7ppts).

Rent Affordability

• The median household would spend 29.6% of its income on a new rental in November. That is 0.1ppts higher than in October and 0.2ppts higher than last November. 
• The pre-pandemic share of median household income spent on rent was 27.2%.
• The most affordable metro areas for rents are Milwaukee (19.9%), Austin (20.0%), Salt Lake City (20.1%), Minneapolis (20.2%), and St. Louis (20.3%).
• The least affordable metro areas for rents are Miami (41.4%), New York (39.4%), Los Angeles (37.0%), San Diego (33.6%), and Riverside (33.2%).
• Income needed to afford rent increased by 3.4% year-over-year in November to $79,301. 
• Since pre-pandemic, the income needed to afford rent has increased by 33%.