Rents Continue To Cool Across Most of the U.S.—Unless You Live in This City

Renters across the U.S. can breathe a sigh of relief, as rent prices have fallen for the 19th straight month. The median asking rent across the 50 largest metros slid to $1,691 in February, shedding $15 compared with the same time last year. However, Americans are still paying much more for housing than they did before the COVID-19 pandemic, with national rent over 14% higher than pre-pandemic levels.​

The declining rental rates have made building multifamily housing less appealing to investors, leading to a potential construction shortage that could spell trouble in the near future. In 2024, fewer than 294,000 units in multifamily rentals were permitted for construction across the 50 largest metros, the lowest number since 2017. This could result in lower rental unit inventory going forward and, in turn, cause rent prices to go up.​

New York City earned the dubious honor of having the highest annual rent growth of any metro in the U.S. The median rent for an apartment in New York City climbed to an eye-popping $2,977, up nearly 7% from the same time last year, and more than $1,000 above the current national median. This dramatic price surge followed a slight dip in multifamily permitting in New York City, which saw 42,230 construction permits issued in 2024, a downtick of 9.5% from 2019.​

Some regions are seeing higher inventory and lower rents. Nine of the top 50 metros experienced a boost in multifamily permitting in 2024 compared to the previous five years, while rents decreased year over year. For example, San Diego saw its monthly rent plunge by 6% to $2,667 after the number of permitted multifamily units jumped by nearly 19% in 2024. Similarly, Birmingham, AL, experienced a 5.4% drop in median rental price to $1,165, following a 22% upswing in construction permitting.​

Although Denver saw a sizeable 41% decrease in multifamily construction last year, the city's median rent experienced the steepest annual drop of all the metros in February, shedding 6.4% to arrive at $1,773.​

Studio Units See Least Rent Growth Since 2019

Studio rent prices have had the smallest rent growth over the past five years, at 9.7%, while two-bedroom apartments have had the steepest uptick in rents, at 18.3%. This could be attributed to fewer young renters becoming first-time homebuyers amid high home prices and mortgage rates, leading them to live with roommates instead, keeping demand for larger rentals elevated.​

The 10 Metros Where Rents Have Fallen the Most

1. Denver, CO: Year-over-year change (0-2 bedrooms): -6.4%; Median monthly rent (0-2 bedrooms): $1,773​
2. San Diego, CA: Year-over-year change (0-2 bedrooms): -6%; Median monthly rent (0-2 bedrooms): $2,667​
3. Birmingham, AL: Year-over-year change (0-2 bedrooms): -5.4%; Median monthly rent (0-2 bedrooms): $1,165​
4. Austin, TX: Year-over-year change (0-2 bedrooms): -4.8%; Median monthly rent (0-2 bedrooms): $1,462​
5. Riverside, CA: Year-over-year change (0-2 bedrooms): -3.6%; Median monthly rent (0-2 bedrooms): $2,071​
6. Raleigh, NC: Year-over-year change (0-2 bedrooms): -3.5%; Median monthly rent (0-2 bedrooms): $1,458​
7. Cincinnati, OH: Year-over-year change (0-2 bedrooms): -3.3%; Median monthly rent (0-2 bedrooms): $1,293​
8. San Francisco, CA: Year-over-year change (0-2 bedrooms): -3.3%; Median monthly rent (0-2 bedrooms): $2,678​
9. Phoenix, AZ: Year-over-year change (0-2 bedrooms): -3.1%; Median monthly rent (0-2 bedrooms): $1,492​
10. Cleveland, OH: Year-over-year change (0-2 bedrooms): -3%; Median monthly rent (0-2 bedrooms): $1,170​

Colorado Springs Rental Market

In Colorado Springs, the average rent as of February 28, 2025, was $1,775, which is below the national average rent of $1,980. This represents a 0.9% year-over-year increase, indicating a relatively stable rental market compared to other metros.​Zillow

   *Comparison to Denver and National Average

Denver's average rent in February 2025 was $1,925, higher than both Colorado Springs and the national average. Specifically, Denver's rent was approximately 8.5% higher than Colorado Springs and 2.3% below the national average. This suggests that while Denver's rental market has experienced declines, it remains more expensive than Colorado Springs.​

If you're considering relocating or investing in the Colorado Springs area, now is an opportune time to explore the housing market. With stable rent prices and a cost of living below the national average, Colorado Springs offers attractive opportunities for both renters and investors. Reach out today to learn more about available properties and how I can assist you in making informed real estate decisions.​ 

Original Article: Rents Continue To Cool Across Most of the U.S.—Unless You Live in This City