After years of rising rent costs across the U.S., the market is finally shifting—and renters are starting to feel some relief. According to Redfin, the national median asking rent fell to $1,594 in December, down 6.2% from the August 2022 peak of $1,700. This marks the lowest level since March 2022, and it’s sparking questions for both renters and landlords alike: What’s causing the drop, and what comes next?
Supply Is Surging—And That’s Changing Everything
The biggest factor driving down rents is simple: there’s more available housing than before.
In fact, the U.S. saw a 58% increase in newly completed apartments in Q3 2023 compared to the same period the year before—the highest number of completions since 1974. That’s a massive surge in supply, especially in fast-growing cities that have seen non-stop development over the last few years.
All that new inventory means renters now have more options, leading to higher vacancy rates and more competitive pricing. Buildings with five or more units saw an 8% vacancy rate, which is the highest since early 2021.
Rents Are Dropping Fastest in These Cities
While the national average is falling, some cities are seeing much steeper declines than others.
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Austin, Texas leads the pack, with rents dropping 16.3% year-over-year. A classic case of overbuilding in a cooling market.
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Other major cities seeing similar rent declines:
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Nashville, TN
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New York, NY
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Tampa, FL
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Jacksonville, FL
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These areas experienced rapid growth during the pandemic, but now supply has outpaced demand—at least for the moment.
But Some Cities Are Still Seeing Rent Growth
Not every market is cooling. In fact, rents are still rising in several metro areas, especially those where supply remains tight.
The biggest rent increases were seen in:
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Providence, Rhode Island (+12.6%)
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Virginia Beach, VA
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Louisville, KY
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Baltimore, MD
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Buffalo, NY
These areas didn’t experience the same building boom as Sun Belt cities, so demand still outweighs supply.
What the Experts Are Saying
Redfin’s Senior Economist, Sheharyar Bokhari, says this rent dip is a natural result of more supply hitting the market and the correction of inflated pandemic pricing.
During COVID-19, rental prices skyrocketed in many cities as people left crowded urban centers and remote work took hold. But those jumps weren’t sustainable—and what we’re seeing now is the market settling back into a more realistic rhythm.
According to Bokhari, this is “a win for renters,” especially in places where apartment construction has outpaced demand.
What This Means for Renters and Landlords
If you’re a renter, this could be the opportunity you’ve been waiting for. With more apartments available and landlords eager to fill them, you may be able to negotiate lower rent, look for move-in specials, or upgrade to a better unit for the same price.
If you’re a landlord or property manager, however, it’s time to pay close attention to your local market. Depending on where you are, it might be necessary to adjust your pricing strategy, offer incentives, or increase focus on tenant retention.
And for developers, the message is clear: carefully weigh supply projections before launching new builds.
Final Thoughts
After years of high demand and rising rents, the U.S. rental market is finally experiencing a cooldown. The combination of a construction boom, shifting migration patterns, and post-pandemic market corrections is leading to a more balanced—but highly competitive—rental landscape.
While this presents a great opportunity for renters, landlords will need to be more strategic than ever to keep units filled and tenants happy.
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