Rents have been on a decline in the top 50 metros for over a year, but low multifamily permitting activity is making way for higher rent prices, according to the Realtor.com February rent report. In fact, within the top 50 metros only 294,000 multifamily units were permitted in 2024, which is well below the 318,000 multifamily permits at the peak of the pandemic in 2020.
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“During the pandemic, rent prices surged significantly. While there has been a gradual correction, the current trend of declining rents over the past 19 months and a still-sizable number of multi-family units under construction have impacted builders’ enthusiasm for new projects,” said Danielle Hale, Chief Economist of Realtor.com®. “The nation is short 3.8 million homes according to Realtor.com® research. As builders attempt to right-size their construction pipelines amid shifting economic and policy cross currents, multifamily builders nationwide have made headway, evidenced by vacancy rates trending up. Still, the shortfall varies by market and region. The low level of permitting for multifamily housing, particularly in markets where rents are still climbing, may become a catalyst for future rent growth.”
When Supply is in a Pinch, Rent Will Rise
In hot markets where demand is high, and rent is already growing, low levels of multifamily housing permitting will cause further supply constraints and could make rents go up even higher in the future. For nine of the top 50 metros, multifamily permitting was lower than recent history in 2024, and these places experienced a rise in rent, including New York, N.Y., Kansas City, Mo., and Detroit, Mich.
| Hot Markets Where Rent is Poised To Grow as Permits Decline | ||
| Metro | Rent Increase YoY | Multifamily Permits vs5-year Baseline |
| New York-Newark-Jersey City, N.Y.-N.J. | 6.80 % | -9.50 % |
| Kansas City, M.O.-Kan. | 6.00 % | -6.00 % |
| Detroit-Warren-Dearborn, Mich. | 3.60 % | -11.60 % |
| Washington-Arlington-Alexandria, D.C.-Va.-Md-W.Va. | 3.30 % | -35.00 % |
| San Jose-Sunnyvale-Santa Clara, Calif. | 1.30 % | -51.00 % |
| Baltimore-Columbia-Towson, Md. | 1.20 % | -22.60 % |
| Boston-Cambridge-Newton, Mass.-N.H. | 0.70 % | -22.30 % |
| St. Louis, Mo.-Ill. | 0.30 % | -27.30 % |
| Charlotte-Concord-Gastonia, N.C.-S.C. | 0.20 % | -19.00 % |
On the other hand, nine of the top 50 metros saw more multifamily permitting in 2024 than over the previous five years and experienced rent price declines YoY including Birmingham, Ala. where rent declined 5.4% YoY, and multifamily building permits grew by 22.10% from the average of the previous five years, Cincinnati, Ohio, where rent declined 3.3% while multifamily building permits grew 29.9%, and Cleveland, Ohio where rents declined 3.0% YoY, and multifamily building permits grew 37.9% from the average of the previous five years. In these metros, multifamily supply growth will put further downward pressure on rent.
Federal Layoffs Haven’t Affected Rent Prices…Yet
While data shows changes starting to happen in the for-sale markets of the major metros where federal employment is high, the rental shifts in these markets are relatively varied and show no meaningful changes, yet. Within the five major metros with the highest concentration of federally-employed workers rent is up 3.3% year-over-year in Washington D.C. with modest pick-up in Oklahoma City, Okla. (+2.0%) and Baltimore, Md. (+1.25%). In San Diego, Calif. however, rent experienced a sharp decline of 6% from a year ago, while also softening in Virginia Beach, Va. (-1.5%).
Larger Rental Units Maintain Demand as Renters Stay Put
As fewer renters turn into first-time home buyers, demand for larger rental units remains high, with 2-bedroom units seeing the most long-term rent growth over the last five years, at 18.3%. That’s compared to 1-bedroom units, which grew 14.3%, and studio units, which experienced the least rent growth, at 9.7%, in the same time frame.
While studio units tend to experience more volatility in activity, this month rent growth for studio units dipped slightly at -0.8% YoY, more closely matching the year-over-year growth of one and two bedroom units, which both respectively experienced -0.7% dips in February 2025.
| National Rental Data – February 2025 | |||
| Unit Size | Median Rent | Rent YoY | Rent Change – 5 Years |
| Overall | $1,691 | -0.9 % | 14.4 % |
| Studio | $1,413 | -0.8 % | 9.7 % |
| 1-Bedroom | $1,583 | -0.7 % | 14.3 % |
| 2-Bedroom | $1,887 | -0.7 % | 18.3 % |
| 50 Largest Metropolitan Areas – February 2025 | ||||
| Metro | Median Rent (0- 2 BR) | YoY Change (0-2 BR) | Multifamily Units Permitted 2024 | Multifamily Units Permitted vs 5-year Baseline |
| Atlanta-Sandy Springs-Roswell, Ga. | 1,573 | -2.6 % | 13937 | 31.5 % |
| Austin-Round Rock-San Marcos, Texas | 1,462 | -4.8 % | 15008 | -26.5 % |
| Baltimore-Columbia-Towson, Md. | 1,795 | 1.2 % | 2425 | -22.6 % |
| Birmingham, Ala. | 1,165 | -5.4 % | 556 | 22.1 % |
| Boston-Cambridge-Newton, Mass-N.H. | 2,936 | 0.7 % | 7022 | -22.3 % |
| Buffalo-Cheektowaga, N.Y. | NA | NA | 563 | 18.2 % |
| Charlotte-Concord-Gastonia, N.C.-S.C. | 1,520 | 0.2 % | 6847 | -19.0 % |
| Chicago-Naperville-Elgin, Ill.-Ind. | 1,776 | -2.1 % | 7403 | 1.4 % |
| Cincinnati, Ohio-Ky.-Ind. | 1,293 | -3.3 % | 2534 | 29.9 % |
| Cleveland, Ohio | 1,170 | -3.0 % | 720 | 37.9 % |
| Columbus, Ohio | 1,198 | 1.1 % | 7195 | 32.7 % |
| Dallas-Fort Worth-Arlington, Texas | 1,461 | -2.0 % | 22912 | -6.6 % |
| Denver-Aurora-Centennial, Colo. | 1,773 | -6.4 % | 6505 | -41.8 % |
| Detroit-Warren-Dearborn, Mich. | 1,320 | 3.6 % | 2023 | -11.6 % |
| Hartford-West Hartford-East Hartford, Conn. | NA | NA | 1488 | 89.2 % |
| Houston-Pasadena-The Woodlands, Texas | 1,368 | -0.9 % | 11520 | -44.3 % |
| Indianapolis-Carmel-Greenwood, Ind. | 1,284 | -2.1 % | 2314 | -32.5 % |
| Jacksonville, Fla. | 1,508 | -1.3 % | 1753 | -69.6 % |
| Kansas City, Mo.-Kan. | 1,370 | 6.0 % | 3663 | -6.0 % |
| Las Vegas-Henderson-North Las Vegas, Nev. | 1,448 | -2.4 % | 2301 | -29.7 % |
| Los Angeles-Long Beach-Anaheim, Calif. | 2,715 | -2.5 % | 13265 | -25.7 % |
| Louisville/Jefferson County, Ky.-Ind. | 1,223 | -1.2 % | 1854 | -10.0 % |
| Memphis, Tenn.-Miss.-Ark. | 1,184 | -1.4 % | 1089 | 39.5 % |
| Miami-Fort Lauderdale-West Palm Beach, Fla. | 2,319 | -2.2 % | 10035 | -28.6 % |
| Milwaukee-Waukesha, Wis. | 1,642 | 1.3 % | 1884 | 101.3 % |
| Minneapolis-St. Paul-Bloomington, Minn.-Wis. | 1,498 | -0.2 % | 5055 | -59.6 % |
| Nashville-Davidson–Murfreesboro–Franklin, Tenn. | 1,525 | -1.7 % | 5384 | -52.0 % |
| New Orleans-Metairie, La. | NA | NA | 287 | -47.3 % |
| New York-Newark-Jersey City, N.Y.-N.J. | 2,977 | 6.8 % | 42230 | -9.5 % |
| Oklahoma City, Okla. | 1,027 | 2.0 % | 581 | 90.4 % |
| Orlando-Kissimmee-Sanford, Fla. | 1,673 | 0.0 % | 8210 | -18.8 % |
| Philadelphia-Camden-Wilmington, Penn.-N.J.-Del.-Md. | 1,751 | -0.3 % | 5054 | -49.4 % |
| Phoenix-Mesa-Chandler, Ariz. | 1,492 | -3.1 % | 13577 | -13.9 % |
| Pittsburgh, Penn. | 1,440 | 0.6 % | 1738 | 2.3 % |
| Portland-Vancouver-Hillsboro, Ore-Wash. | 1,649 | -2.7 % | 2696 | -58.5 % |
| Providence-Warwick, R.I.-Mass. | NA | NA | 656 | 175.4 % |
| Raleigh-Cary, N.C. | 1,458 | -3.5 % | 5574 | -12.8 % |
| Richmond, Va. | 1,477 | 0.0 % | 3408 | -14.0 % |
| Riverside-San Bernardino-Ontario, Calif. | 2,071 | -3.6 % | 3012 | -20.9 % |
| Rochester, N.Y. | NA | NA | 750 | -8.9 % |
| Sacramento-Roseville-Folsom, Calif. | 1,883 | -0.2 % | 2701 | -8.2 % |
| San Antonio-New Braunfels, Texas | 1,240 | -1.3 % | 3803 | -54.1 % |
| San Diego-Chula Vista-Carlsbad, Calif. | 2,667 | -6.0 % | 7244 | 18.8 % |
| San Francisco-Oakland-Fremont, Calif. | 2,678 | -3.3 % | 2929 | -60.4 % |
| San Jose-Sunnyvale-Santa Clara, Calif. | 3,300 | 1.3 % | 1886 | -51.0 % |
| Seattle-Tacoma-Bellevue, Wash. | 1,957 | -0.8 % | 9880 | -36.1 % |
| St. Louis, Mo.-Ill. | 1,304 | 0.3 % | 1821 | -27.3 % |
| Tampa-St. Petersburg-Clearwater, Fla. | 1,739 | -0.4 % | 7545 | -9.0 % |
| Virginia Beach-Chesapeake-Norfolk, Va.-N.C. | 1,487 | -1.5 % | 1250 | -42.8 % |
| Washington-Arlington-Alexandria, D.C-Va.-Md.-W.Va. | 2,283 | 3.3 % | 9680 | -35.0 % |
