The typical U.S. asking rent reached $1,962 in July, up 2.3% from a year earlier.
Rent growth accelerated to its fastest pace in more than a year as construction of new apartments slowed.
Renters can still find deals: Nearly 40% of Zillow rental listings offered a concession, such as free rent or reduced deposits.
The typical asking rent in the United States is approaching $2,000 a month, and tenants may soon have fewer opportunities to negotiate as the supply of new apartments declines.
The typical rent rose to $1,962 in July, an increase of 2.3% from a year earlier, according to Zillow’s latest rental market report. That was the fastest annual growth rate in more than a year.
The increase follows two years in which a wave of apartment construction gave renters more choices and pushed landlords to offer incentives. Zillow said that supply boost is starting to fade as fewer new projects enter the pipeline.
Multifamily construction permits in the second quarter were 31% below their most recent peak in 2022. If construction continues to slow, the rental market could tighten further as existing units are absorbed.
“Renters have benefited from one of the most favorable supply surges in decades,” Zillow Chief Economist Mischa Fisher said in the report. He warned that the supply advantage is fading and rent growth is beginning to accelerate.
Deals remain available
Despite the increase in rents, concessions remain widespread. In July, 39.8% of rental listings on Zillow offered some type of incentive, up from 35.9% a year earlier.
Concessions can include a free month of rent, reduced security deposits, free parking or waived application fees. They are most common in markets that recently added large numbers of apartments.
Charlotte had the nation’s highest concession rate at 68.1%, followed by Denver at 67.2% and Dallas at 65.6%. Raleigh, Austin and Nashville also had concession rates above 60%.
Those figures suggest renters in heavily built markets may still have negotiating power, even if the advertised monthly rent has not declined. Consumers comparing apartments should calculate the total cost over the full lease term because a concession may make one property cheaper than another with a lower advertised rent.
Conditions are significantly different in markets where construction has not kept up with demand. San Francisco posted the largest annual rent increase among the metropolitan areas in Zillow’s report, rising 9.7% to $3,372. Rents increased 7% in San Jose to $3,782 and 5.1% in Chicago to $2,253.
Some markets recorded rent declines. Typical rents fell 1.8% in San Antonio and 0.9% in both Denver and Austin. Tampa rents declined 0.5%.
Renting still costs less than buying
High home prices and mortgage rates above 6.5% are also helping maintain demand for rental housing. Many consumers who might otherwise buy a home are remaining renters because monthly mortgage payments have become less affordable.
Zillow estimates that a household needs annual income of $78,488 to comfortably afford the typical rental. Buying a typical home requires income of nearly $99,800—a difference of more than $21,000.
The typical renter spends 26.8% of household income on rent, according to Zillow. That is below the 30% level commonly used to identify households burdened by housing costs, although affordability varies sharply by market. Renters in New York spend an estimated 40.9% of their income on rent, while the figure is 37.1% in Miami and 34.1% in Los Angeles.
Single-family rentals are also becoming more expensive faster than apartments. Their typical rent climbed 3% to $2,314, compared with a 1.7% increase for multifamily housing, where the typical rent reached $1,786.
Zillow forecasts multifamily rents will rise about 1.9% for all of 2026, while single-family rents are expected to increase about 2.9%. Both rates would remain below their long-term averages, but the narrowing construction pipeline suggests the unusually renter-friendly conditions of the last two years may be drawing to a close.