Uncertainty on the Rent Roller Coaster, Housing

In Houston, Leasing an apartment has often been considered a viable and affordable substitute to home ownership when high residential prices, elevated mortgage rates or other obstacles place residential purchases beyond the reach of an average household.

This too-pricey-to-buy situation has plagued the housing market for several years now. But a new report by Seattle-based real estate brokerage Redfin says apartment rents have been taking an upward turn of late, cutting into the advantage once enjoyed by potential renters and giving landlords more bargaining power in the marketplace.

Redfin’s report says the median U.S. asking rent rose 2.6 percent ($45) year-over-year to $1,790 a month in August, the largest increase since December 2022. That puts the price of a typical lease unit just $70 below the record high recorded during the summer of 2022.

In its study, Redfin noted that August marked the third consecutive month of year-over-year increases following roughly two years of declining or flat rents. On a month-over-month basis, the median asking rent rose 0.3 percent in August 2025.

The information is based on an analysis of median asking rents for U.S. buildings containing 25 or more units and listed on Redfin.com. The report focuses on the three-month period ending Aug. 31, 2025.

Redfin attributes the meager rent rise in August to a slowdown in supply due in part to high homebuying costs coupled with vigorous demand by would-be renters. The number of new apartments hitting the market has dropped 45 percent since the pandemic building boom, a shift that landlords are using to buttress their bartering positions. In other words, rents are rising because demand is strong, and supply is cooling.

“Apartment construction boomed during the pandemic, but many of those projects have since wrapped up and fewer new ones are breaking ground,” says Redfin Senior Economist Sheharyar Bokhari. “Builders are pumping the brakes due to high financing costs, elevated construction expenses and weaker investor appetite. With fewer new apartments coming on the market, renters have a smaller number of options to choose from, and landlords are regaining the ability to raise prices.”

The report says the number of new apartments being completed fell to a seasonally adjusted annual rate of 385,000 in July. That’s down 45.4 percent from a peak of 705,000 in August of 2024.

Permits to build apartments are also dropping, down more than 20 percent since the pandemic construction boom, says a separate Redfin report issued last month.

In many parts of the country, renters have been relishing their success in asking for concessions like free parking or reduced rent. But those perks may dry up as supply continues to fall.

Chicago Posts biggest rent hike, Austin biggest drop
In Chicago, the median asking rent rose 10.7 percent year-over-year in August to $2,275, the biggest increase among the 42 major core-based statistical areas (CBSAs) analyzed by Redfin. San Jose, Calif. saw the second-largest increase (10.6 percent), followed by Philadelphia (9.9 percent), Pittsburgh (9.8 percent) and Washington, D.C., 8.7 percent.

Only three metros saw price declines: Austin (-3.1 percent), Louisville (-2.4 percent) and Jacksonville, 1.9 percent.

The figures derive from the supply issue. Florida and Texas are permitting more multifamily housing than other parts of the country. Austin granted permits to build 63.6 multifamily units for every 10,000 people over the past year, the second highest among the metros Redfin analyzed.

Orlando and Jacksonville are also near the top of the list when it comes to permitting.

0–1-bedroom units see biggest jump

The median asking rent for 0-1-bedroom apartments rose 4.4 percent year over year to $1,650 in August, the biggest increase since September 2022.

For two-bedroom apartments, it increased 3.6 percent to $1,920, which was also the largest jump since September 2022. For units with three or more bedrooms, rent was flat (0.0 percent year-over-year) at $2,199, the first time in five months there hasn’t been a decline.