More property managers offered concessions on their rental properties in July as rent growth slowed, new data from Zillow reveals. The post-pandemic construction frenzy continues to help soften rent growth. More new multifamily units were completed in June than in any month since the 1970s.
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The share of rental listings on Zillow offering a concession — a sweetener such as free weeks of rent or free parking offered as an incentive to rent — climbed to 33.2% in July. That’s up slightly from 33% in June and 25.4% a year earlier.
“Builders have stepped up and built an incredible number of homes in response to soaring rents during the pandemic, and renters are now seeing the benefits,” said Zillow Chief Economist Skylar Olsen. “Now is a great time for renters to find a deal, with more new apartments hitting the market than at any time in the past several decades. Rents are still growing, but it’s a far cry from the steep rent hikes of two or three years ago, and renters will find sweeteners being offered by more than half of rentals in some places. A slowing job market and lower mortgage rates could mean falling rents if the current trends hold.”
The past two years have been fairly friendly for apartment renters. While multifamily rents are still rising, up 5.1% since July 2022, that pace is in line with historic norms and welcome relief for renters after an astounding 22.3% increase in the previous two years. Monthly rent growth for multifamily units slowed in July for the second month in a row.
More rental concessions
Renters have enjoyed rental concessions more often during the past two years, as well. The share of rental listings on Zillow offering at least one concession was at a 29-month low in July 2022 at 19.4%. That share has climbed considerably since then, peaking at 33.6% in April.
More than half of rental listings on Zillow are offering a concession in six major metro areas: Raleigh (53.3%), Charlotte (53%), Atlanta (52.2%), Salt Lake City (50.9%), Nashville (50.8%) and Austin (50.5%). Four major metros have a smaller share of listings with a concession than last year, indicating a more competitive rental market. Those are San Jose (-9.7 percentage points), Baltimore (-5.6), Milwaukee (-1.8) and Pittsburgh (-0.2).
One reason for the rental market cooldown is a multifamily construction frenzy that is opening up new options for renters and rebalancing the supply and demand seesaw. Almost 60,000 multifamily units were completed nationwide in June — the latest data available — which is more than in any month in half a century.
The supply boom still has legs, but it may have hit its peak. While there are still a huge number of multifamily units under construction — before this recent boom, 1973 was the last time this many units were being built —that number has fallen in each of the past eight months.
The rental vacancy rate, another measure of market tightness, held steady at 6.6% in the second quarter of this year, where it has sat for the past four quarterly readings. That’s the highest since winter 2021.
Zillow provides a user-friendly platform for housing providers to share concessions information with prospective renters. Property managers can easily list concessions for their properties, and renters can find all available offers under the “Special Offers” tab on participating buildings’ detail pages, enabling them to make well-informed housing decisions.
| Metropolitan Area* | Typical Rent, Multifamily Units, Zillow Observed Rent Index (ZORI) | Multifamily ZORI Change, Month Over Month (MoM) | Multifamily ZORI Change, Year Over Year (YoY) | Listings With a Concession | Concessions Change, MoM (Percentage Points) | Concessions Change, YoY (Percentage Points) |
| United States | $1,916 | 0.4 % | 2.6 % | 33.2 % | 0.2 ppts | 7.8 ppts |
| New York, NY | $3,448 | 0.6 % | 3.4 % | 15.9 % | 0.4 ppts | 3.9 ppts |
| Los Angeles, CA | $2,751 | 0.5 % | 2.0 % | 30.2 % | 1.7 ppts | 2.8 ppts |
| Chicago, IL | $2,042 | 0.4 % | 4.4 % | 24.9 % | 2.5 ppts | 8.1 ppts |
| Dallas, TX | $1,605 | 0.2 % | -1.4 % | 47.6 % | -1.1 ppts | 10.3 ppts |
| Houston, TX | $1,511 | 0.1 % | 0.8 % | 35.4 % | -0.6 ppts | 5.7 ppts |
| Washington, DC | $2,351 | 0.7 % | 4.4 % | 47.4 % | 0.6 ppts | 2.5 ppts |
| Philadelphia, PA | $1,803 | 0.4 % | 3.2 % | 30.2 % | 1.7 ppts | 8.3 ppts |
| Miami, FL | $2,558 | 0.1 % | 2.6 % | 17.4 % | -0.1 ppts | 4.3 ppts |
| Atlanta, GA | $1,740 | 0.0 % | -1.4 % | 52.2 % | -0.2 ppts | 14.5 ppts |
| Boston, MA | $3,057 | 0.2 % | 4.2 % | 21.7 % | 2 ppts | 7.1 ppts |
| Phoenix, AZ | $1,624 | -0.2 % | -0.3 % | 50.1 % | 0.3 ppts | 9.6 ppts |
| San Francisco, CA | $2,862 | 0.2 % | 0.5 % | 38.6 % | -0.4 ppts | 0.7 ppts |
| Riverside, CA | $2,345 | 0.2 % | 2.2 % | 19.1 % | -2.3 ppts | 1.7 ppts |
| Detroit, MI | $1,374 | 0.6 % | 4.8 % | 23.3 % | 2.5 ppts | 1.5 ppts |
| Seattle, WA | $2,119 | 0.5 % | 3.1 % | 44.2 % | 1 ppts | 12.1 ppts |
| Minneapolis, MN | $1,587 | 0.1 % | 2.3 % | 49.8 % | -0.2 ppts | 10.9 ppts |
| San Diego, CA | $2,795 | 0.4 % | 0.1 % | 34.3 % | 1.4 ppts | 12.4 ppts |
| Tampa, FL | $1,844 | 0.3 % | 0.3 % | 42.0 % | 1 ppts | 13.9 ppts |
| Denver, CO | $1,911 | 0.3 % | 1.3 % | 48.9 % | 0.8 ppts | 14.1 ppts |
| Baltimore, MD | $1,793 | 0.5 % | 2.7 % | 32.7 % | -2.2 ppts | -5.6 ppts |
| St. Louis, MO | $1,314 | 0.9 % | 3.9 % | 21.6 % | -3.1 ppts | 3.8 ppts |
| Orlando, FL | $1,876 | 0.2 % | -0.3 % | 38.7 % | 0.1 ppts | 8.6 ppts |
| Charlotte, NC | $1,616 | 0.5 % | -0.8 % | 53.1 % | -2 ppts | 15.7 ppts |
| San Antonio, TX | $1,308 | -0.1 % | -1.1 % | 46.4 % | -2.4 ppts | 12.3 ppts |
| Portland, OR | $1,740 | 0.6 % | 2.9 % | 43.5 % | 3.1 ppts | 6.3 ppts |
| Sacramento, CA | $2,051 | 0.0 % | 2.5 % | 29.3 % | 1.8 ppts | 5.6 ppts |
| Pittsburgh, PA | $1,380 | 0.6 % | 3.8 % | 21.8 % | -0.5 ppts | -0.2 ppts |
| Cincinnati, OH | $1,379 | 0.3 % | 4.0 % | 20.0 % | 1.6 ppts | 5.7 ppts |
| Austin, TX | $1,601 | -0.3 % | -4.5 % | 50.5 % | 0.9 ppts | 14.1 ppts |
| Las Vegas, NV | $1,557 | -0.02 % | 2.2 % | 39.4 % | -0.1 ppts | 2.5 ppts |
| Kansas City, MO | $1,338 | 0.4 % | 4.9 % | 26.7 % | -2.6 ppts | 7.9 ppts |
| Columbus, OH | $1,426 | 0.6 % | 3.3 % | 34.4 % | -1.3 ppts | 10.5 ppts |
| Indianapolis, IN | $1,380 | 1.0 % | 2.4 % | 33.2 % | 0.6 ppts | 8.8 ppts |
| Cleveland, OH | $1,361 | 0.4 % | 6.5 % | 23.1 % | -0.3 ppts | 4.6 ppts |
| San Jose, CA | $3,212 | 0.9 % | 2.7 % | 33.6 % | 3.1 ppts | -9.7 ppts |
| Nashville, TN | $1,742 | 0.2 % | 0.2 % | 50.8 % | 0.5 ppts | 11.1 ppts |
| Virginia Beach, VA | $1,589 | 0.9 % | 5.0 % | 28.6 % | -1 ppts | 10.7 ppts |
| Providence, RI | $2,006 | 0.9 % | 7.0 % | 13.6 % | -1.4 ppts | 6 ppts |
| Jacksonville, FL | $1,537 | -0.1 % | -1.4 % | 45.6 % | -0.2 ppts | 17.8 ppts |
| Milwaukee, WI | $1,299 | 0.5 % | 4.8 % | 17.1 % | -1.5 ppts | -1.8 ppts |
| Oklahoma City, OK | $1,108 | 1.2 % | 3.1 % | 23.8 % | 3.3 ppts | 11.1 ppts |
| Raleigh, NC | $1,557 | 0.3 % | -2.4 % | 53.3 % | 1.8 ppts | 14.7 ppts |
| Memphis, TN | $1,299 | 0.1 % | 2.8 % | 25.8 % | -0.2 ppts | 9.8 ppts |
| Richmond, VA | $1,579 | 0.9 % | 5.1 % | 38.5 % | 1.5 ppts | 4.9 ppts |
| Louisville, KY | $1,304 | 0.2 % | 6.2 % | 30.4 % | 5.3 ppts | 11 ppts |
| New Orleans, LA | $1,544 | 0.2 % | 3.5 % | 10.1 % | -0.7 ppts | 2 ppts |
| Salt Lake City, UT | $1,571 | 0.3 % | 1.7 % | 50.9 % | -1.7 ppts | 6.7 ppts |
| Hartford, CT | $1,779 | 0.6 % | 8.3 % | 23.3 % | -0.7 ppts | 9.5 ppts |
| Buffalo, NY | $1,339 | 0.9 % | 5.0 % | N/A | N/A | N/A |
| Birmingham, AL | $1,315 | 0.4 % | -0.7 % | 36.3 % | 7.2 ppts | 12.8 ppts |
