For much of the past several years, renters across the U.S. have been squeezed by steadily climbing housing costs. From the pandemic-driven demand surge to inflation and limited housing supply, finding affordable rent has been an uphill battle. But new data from Redfin reported by Fox 5 DC shows a turning point: rents are beginning to fall in many parts of the country.
In May 2025, the national median asking rent dropped by 1% year-over-year to $1,633, the largest nationwide decline since September 2023. That’s down $72 from the record high of $1,705 set in August 2022. This cooling trend suggests renters may finally see relief after years of relentless increases.
The Numbers Behind the Decline
Out of 44 major metropolitan areas tracked by Redfin, 28 reported rent declines in May, making this the broadest decline in nearly two years.
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Austin, TX emerged as the clear leader in falling rents, with an 8.8% drop year-over-year. Once one of the hottest housing markets in the country, Austin’s rapid construction boom and growing supply have finally eased pressure on renters.
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Minneapolis, MN followed with a 6.3% drop, reflecting a combination of increased inventory and shifting demand.
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Other metros posting notable declines include Columbus, OH (–3.5%), Nashville, TN (–3.4%), and Portland, OR (–3.4%).
While these numbers may seem modest, even small declines can significantly impact affordability, especially for households already devoting large portions of their income to rent.
Where Rents Are Still Rising
Of course, the picture isn’t uniform. While many renters are catching a break, others are still facing increases:
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Cincinnati, OH tops the list of rising markets, with rents jumping 7.4% year-over-year, pushing the median to $1,460.
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Tampa, FL (+4.2%), St. Louis, MO (+4.0%), Pittsburgh, PA (+3.5%), and Washington, D.C. (+2.4%) also saw gains.
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In fact, several metros even hit record-high asking rents:
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Chicago, IL – $1,781
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Cincinnati, OH – $1,460
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Memphis, TN – $1,274
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Washington, D.C. – $2,104
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These rising markets highlight that while national averages are declining, local dynamics such as limited housing stock or strong population growth still drive prices upward in certain areas.
A Closer Look: Apartment Sizes and Affordability
Breaking down rents by apartment size shows that relief is uneven across unit types:
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One-bedroom apartments fell by 0.7% to $1,492.
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Two-bedroom units saw the steepest drop, down 1.8% to $1,704 the largest decrease since February 2024.
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Three-bedroom or larger units only edged down 0.2% to $2,009, signaling that family-sized housing remains a challenge for affordability.
For renters seeking smaller units, the shift is more noticeable. However, families or larger households may not feel the benefit as much, given that bigger apartments remain relatively stable in price.
Why Are Rents Falling?
Several factors explain the cooling rental market:
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New Construction Supply – Over the past few years, developers have poured new rental units into markets like Austin, Dallas, and Nashville. As those units hit the market, competition increases and landlords face pressure to lower asking rents or offer concessions.
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Shifting Demand – With higher mortgage rates making buying less accessible, many expected rental demand to remain strong. However, some renters are doubling up with roommates, moving back home, or relocating to lower-cost markets, easing demand in pricier metros.
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Seasonal Trends – Rent prices often peak in late summer when moving activity is at its highest. The May dip could be an early sign that 2025 will bring more balanced pricing trends.
What This Means for Renters and Landlords
For renters, the trend is encouraging. Lower asking rents and a more competitive market give tenants greater negotiating power. This could translate into more favorable lease terms, rent discounts, or added incentives like free parking or reduced deposits.
For landlords, however, the story is different. After years of steadily raising rents with little resistance, property owners may need to adjust expectations. The increase in supply means landlords will have to compete more aggressively to attract and retain tenants, especially in cities with large surpluses of new apartments.
The Bigger Picture
While a 1% national drop may not seem dramatic, the implications are significant. If the trend continues, it could reshape housing affordability debates and influence policymaking at both local and federal levels. For cities like Austin, the data signals that rapid building can indeed curb rising rents a key lesson for metros still grappling with affordability crises.
At the same time, the uneven landscape underscores the complexity of the U.S. rental market. Renters in cities like Cincinnati and Washington, D.C., may still struggle as costs hit record highs, highlighting the need for nuanced, local housing solutions.
Conclusion
The rental market is entering a new chapter. After years of unrelenting increases, renters in many U.S. cities are finally experiencing relief especially in supply-rich markets like Austin and Minneapolis. But the picture isn’t universally rosy, as rising rents in Cincinnati, Tampa, and Washington, D.C., remind us.
For now, though, the numbers point to cautious optimism: the rental tide may finally be turning, giving millions of Americans a bit of breathing room in their housing budgets.
Source: “Rent prices falling in most U.S. cities, report finds” – Fox 5 DC