US Apartment Rents Erase Pandemic Detour: Report

After gradual cooling over the past few years, U.S. apartment rents have erased the pandemic detour, and with construction leveling off, annual rent growth could return to modest, steady increases in 2027, according to a recent report.

However, regional differences could remain significant, real estate professionals and analysts say.

A Rollercoaster Ride    

From 2017 to 2019, the national median rent rose at an average annual rate of 2.5 percent, roughly in line with overall inflation at 2.1 percent, according to a mid-September Apartment List report.

However, rents began to soar in 2021, driven by a sharp increase in housing demand.

At its peak in August 2022, the national median rent was 14 percent higher than it would have been if pre-pandemic rent trends had continued.

Rent growth has gradually cooled over the past four years. The national median rent in August was $1,390, nearly identical to the $1,395 projected for pre-COVID-19 prices.

“We’ve now reached the point that those alternating hot and cold spells have essentially cancelled each other out,” the report states.

“The national median rent is almost exactly where it would have been if rent growth since 2020 had remained on the slow and steady pre-pandemic trajectory.”

The report attributes this cooldown to new multi-family unit construction in various markets.

As properties competed for renters, prices began to slip and, the report notes, since 2023, annual rent growth has been consistently negative.

During the main pandemic years of 2020–2022, 1.2 million newly built apartments were brought to the market, with Dallas metro opening the most, according to a 2023 report from RentCafe.

Outliers

However, the report notes that the national median has masked a significant regional divergence: rent growth has far outpaced the national pre-pandemic trend in many Northeast and Midwest markets, while lagging considerably in the South and West.

Among the 50 largest metros, Buffalo, New York, was the biggest “outlier,” with monthly median rent increasing to $1,259 in August.

That was 66 percent higher than the $760 in early 2020 and 37 percent higher than it would have been if the city’s rents had grown at the pre-COVID-19 annual rate of 2.5 percent.

The report showed that before 2020, Buffalo’s rental market was flat, increasing by an average of 0.6 percent annually from 2017 through 2019, while in August, its median rent was 51.4 percent higher than it would have been.

Chicago also bucked the national trend by a large margin.

According to Apartment List, the city’s August median rent was $1,898, 9.2 percent higher than the pre-COVID national average annual rate.

According to a Sept. 28 report from RentCafe, Chicago has overtaken Miami as the nation’s most competitive rental market during the summer months.

Vacant apartments in the city took an average of 27 days to fill—the fastest time among large markets. The national average was 42 days.

Steven Meyer, founder of Best Property Management in Chicago, said the city is facing a shortage of new apartment supply, as many two- to four-unit buildings were converted into single-family homes between 2013 and 2019.

“When supply is fixed or shrinking, the national pressure to keep renting units turns directly into rent growth,” he told The Epoch Times.

He also attributed Buffalo’s rising rents to the lack of substantial new multi-family construction.

“Buffalo built very little,” he said.

“Older cities with tight land, older zoning and slower permitting simply cannot add housing quickly, so steady demand pushes rents up.

“I’m not a national data shop—I’m the view from a Midwest market that looks a lot more like Buffalo,” Rob Bergeron, a local realtor and co-owner of Louisville, Kentucky-based private investor marketplace OffMarket.Deals, told The Epoch Times.

“Older Rust Belt and Midwest cities didn’t build much. Rents there started low, so when people got priced out of the expensive coastal cities, these markets looked like a bargain.”

As a result, Bergeron said, more renters are chasing the same old housing stock, pushing rents up.

He noted that even a large percentage jump from a low starting point can still leave the rent affordable compared to many parts of the country.

Bergeron said Louisville has a lot in common with Buffalo regarding offering small multi-family units and single-family homes for affordable rents.

“It’s also why out-of-state investors from places like California and Texas keep calling us,” he said. “They can buy here for a fraction of what they’d pay at home and the rent still covers the bills.”

Other markets where rents have skewed higher in market-specific prices include Oklahoma City, at 22.8 percent above the pre-pandemic trend, and Miami, at 19.1 percent above.

On the other end, Phoenix’s median rent dropped 24.7 percent from what it would have been had the market remained stable since 2020.

Apartment List’s comparison chart shows the Phoenix metro’s actual median rent at $1,348 in August, compared with a market-specific rental price of $1,791 if rents had grown at the average pace seen in that metro from 2017 to 2019.

The report notes that before 2020, Phoenix had been one of the country’s hottest rental markets, with prices increasing about 7 percent per year from 2017 through 2019.

It also notes that a “historical wave of apartment construction” resulted in a temporary oversupply in Phoenix and some additional markets.

With properties competing for renters to fill units, many began to cut prices, the report says, and since 2023, annual rent growth has consistently been negative.

“Developers poured money into new apartment complexes when rates were low, and those buildings all finished around the same time,” Bergeron said.

“When a lot of new units hit one market at once, landlords have to compete for tenants, and that means free months, discounts, and rents going down.”

Bergeron noted that people haven’t stopped moving to Phoenix; it’s just that builders showed up faster than renters.

Alexei Morgado, a Florida real estate agent and owner of Lexawise, a national real estate exam prep service, agrees.

“The 25 percent gap in Phoenix’s case stems from an unusually high pre-pandemic growth rate there,” he told The Epoch Times. “Phoenix then experienced great pandemic demand followed by a substantial cycle of apartment construction.”

Other market rents that have lower market-specific prices include Las Vegas, where the median rent was 22 percent below where it would have been if rent growth mirrored the pace from 2017 to 2019.

The actual August recorded rent was $1,415, compared with $1,813.

Austin, Texas, also experienced rental slumps with an August median of $1,300—15.5 percent lower than it would have been if rent growth had followed the same pattern from 2017 through 2019.

In that case, the median rent would have registered at $1,538.

Rental Outlook for 2027

While it reported national rents are still declining year over year, Apartment List noted that the construction boom may be leveling off and occupancy will begin to tighten.

It predicts positive rent growth will gradually return, making 2027 the first year since 2019 the market could have “normal” rent growth.

According to a September Congressional Research Service analysis, about 397,000 multi-family housing units were started in 2025, an increase from the 336,000 units in 2024 but far below the 533,000 units in 2022.

Multi-family housing refers to buildings with five or more units.

Census Bureau data show that, from January through August this year, multi-family starts were about 289,700 units, compared with the 350,200 units in the first eight months of 2022.

“I think we’re getting to the point where rents are starting to stabilize on a national level, with growth by the end of the year and into 2027 in the low single digits,” Apartment List chief economist Chris Salviati told The Epoch Times.

“Typically, rent growth tends to keep pace with inflation.”

However, he noted that specific metros will likely continue to present different data.

“There are always variations where some markets over-perform and under-perform compared to the national trend,” he said.

Salviati noted Phoenix and Austin may continue to lag in rent growth, as those metros are among those with the lion’s share of extra multi-family housing units.

Conversely, he said, high-demand metros like San Francisco may continue to outpace the national average.

The city’s August median rent was up 26 percent from last year, according to Apartment List.

“In markets like San Francisco, where you have an expanding labor market and housing demand, renters are typically going to spend a lot more for apartments,” he said.

Midwestern markets such as Kansas City, Milwaukee, and Cleveland may see slight growth but still offer more affordable options.

Bergeron said a good indication of how the rental market will fare by the end of 2026 and into early 2027 is the number of new units finished over the past few years.

Rents in areas where apartments have been overbuilt may continue to skew lower, he said, while rents in under-built metros will likely run higher.

“Renters in overbuilt markets have leverage right now,” he added. “Renters in under-built markets should try to lock in a longer lease that keeps the cost consistent.”

Morgado said, “The real issue here is how quickly each of the markets will be able to add new supply if the demand changes.”