U.S. Asking Rents Drop 1% Year-Over-Year in April: Biggest Decline in Over a Year
The U.S. rental market is showing signs of cooling, with the median asking rent dropping 1% year-over-year to $1,625 in April, according to a new report from Redfin. This marks the largest decline since February 2024 and reflects a market where elevated apartment supply is outpacing demand. The current median rent is $80 below the record high of $1,705 set in August 2022. While rents dipped on an annual basis, they rose slightly by 1.2% month-over-month—a typical seasonal trend for this time of year.
Why Are Rents Falling?
The primary driver behind the decline in asking rents is the growing imbalance between apartment supply and renter demand. “Asking rents are sluggish because there are more apartments for rent than people who want to rent them,” explained Redfin Senior Economist Sheharyar Bokhari. Although renter demand remains strong, the surge in multifamily construction following the pandemic-era housing frenzy has led to an oversupply of available units.
Data supports this trend. The rental vacancy rate for buildings with five or more units reached 8.2% in the first quarter of 2025—the highest level since early 2021. Additionally, less than half of newly built apartments are being rented out within three months, one of the lowest shares on record. These factors contribute to declining rents in many areas across the country.
However, it’s worth noting that while rents fell last month, the broader picture indicates relative stability. For 14 consecutive months, year-over-year changes in asking rents have remained minimal, fluctuating by no more than 1%. This stands in stark contrast to the volatile swings seen during the pandemic era when rents soared as much as 17.7% and plummeted by up to 4.1%.
Austin Leads Rent Declines Amid Housing Affordability Challenges
Austin, Texas, experienced the sharpest drop in asking rents among major metropolitan areas, with a 9.6% year-over-year decrease to $1,399 in April. This represents a staggering $400 reduction from its peak, making it the largest percentage decline among the 44 core-based statistical areas (CBSAs) analyzed by Redfin. Other cities with notable declines include Minneapolis (-7.3%), Portland, OR (-5.3%), San Diego (-5.2%), and Raleigh, NC (-5.2%).
Texas was a hotspot for homebuilding during the pandemic-induced construction boom, which partly explains why Austin is now seeing such significant rent reductions. For renters, this shift offers some relief amid rising housing costs elsewhere.
Local Redfin Premier real estate agent Andrew Vallejo highlighted the affordability gap between renting and buying in Austin. “Many people in Austin are finding that it’s a lot cheaper to rent than buy,” he said. “You could buy a home and face a monthly mortgage payment of $3,200, whereas the same home will rent for just $1,900.” With mortgage rates at record highs, potential buyers need to earn over $50,000 more annually than renters to afford homeownership—an increasingly challenging hurdle for many Americans.
This affordability disparity is driving increased demand for rentals, particularly in markets like Austin where renting provides a cost-effective alternative to purchasing.
Rising Rents in Smaller Markets
While some cities saw steep declines, others experienced notable increases in asking rents. Cincinnati led the pack with an 8.7% year-over-year increase, followed by Pittsburgh (+7.5%), Baltimore (+5.9%), Birmingham, AL (+5.8%), and Washington, D.C. (+5.2%). These gains highlight regional variations in the rental market, often driven by local economic conditions and population growth trends.
Two-Bedroom Apartments See Largest Rent Drops
Among different unit types, two-bedroom apartments witnessed the steepest declines. The median asking rent for these units fell 1.5% year-over-year to $1,699—the largest drop since February 2024. Meanwhile, rents for smaller 0-1 bedroom apartments decreased by 1.2% to $1,481, and those for larger 3+ bedroom units dropped 1% to $1,999.
This trend underscores shifting preferences among renters, who may be opting for smaller spaces or seeking affordability in a competitive market.
