A Map of All 73 Cities The place Rents Have Dropped This 12 months

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Builders constructed practically 600,000 condominium models final yr, setting a brand new document. That glut of recent provide, coupled with fears over commerce war-induced inflation and recession, has prompted rents to gradual, stall, and even drop in 2025. 

Actually, 73 cities throughout the nation have seen rents fall within the first 5 months of the yr. Right here’s the place they’re, a deeper dive into what’s inflicting rents to fall, and the outlook for rents transferring ahead. 

Cities With Falling Rents

With a couple of exceptions, cities with falling rents have principally clustered within the Sunbelt, Northeast, and Midwest. 

Whereas all actual property is native, the nationwide development has actually moved in renters’ favor. On its Lease Supervisor overview, Zillow now reveals the common hire nationwide has dropped by $30 over the past yr. 

Softening rental markets can ding traders in different methods, too. Usually, property managers need to provide incentives to lure new renters and preserve occupancy sturdy. Whereas many of the multifamily investments we’ve gone in on by the co-investing membership have averted it, we have now seen a few properties which have needed to enhance incentives. 

For reference, listed here are the 20 cities the place rents have fallen probably the most in 2025:

Metropolis	Common Lease	2025 Lease Decline
1. Athens, OH	$802	-8.51%
2. The Villages, FL	$2,007	-7.21%
3. Sunbury, PA	$904	-6.73%
4. Pullman, WA	$1,436	-5.94%
5. Naples, FL	$2,833	-5.37%
6. Sevierville, TN	$1,736	-5.33%
7. Key West, FL	$3,887	-5.31%
8. Fond du Lac, WI	$1,045	-5.02%
9. Edwards, CO	$3,864	-4.24%
10. Bay Metropolis, MI	$1,240	-3.74%
11. Cortland, NY	$1,292	-3.71%
12. Georgetown, SC	$2,168	-3.52%
13. Mount Nice, MI	$1,120	-3.39%
14. Blacksburg, VA	$1,767	-3.36%
15. Freeport, IL	$793	-2.98%
16. Scorching Springs, AR	$1,385	-2.83%
17. Clearlake, CA	$1,813	-2.82%
18. Lebanon, PA	$1,388	-2.81%
19. Hattiesburg, MS	$1,369	-2.72%
20. Mount Vernon, WA	$2,161	-2.42%

What’s Inflicting Rents to Drop?

Markets transfer in cycles, and rents surged after the pandemic, after remaining artificially locked as a consequence of eviction moratoriums. That post-pandemic surge has slowed to a trickle in 2025, and a drought in many markets. 

Glut of recent provide

As touched upon, some markets received flooded with new rental stock. Housing begins for multifamily properties reached a month-to-month low of 233 in April 2020, at “peak pandemic panic.” Over the subsequent two years, they practically tripled to 615 by November 2022. 

Lots of these initiatives accomplished in 2024 are coming onto the market now in 2025. 

Softening labor market

As of this writing, the newest Labor Division information noticed the four-week transferring common of jobless claims attain the highest degree since August 2023. 

Fewer employers are hiring, and fewer employees are quitting. There’s a lot uncertainty within the economic system between commerce wars, tariffs, and wild public coverage swings in Washington, D.C. that employers and staff alike are treading fastidiously. 

Much less assured employees make extra conservative renters, who’re much less keen to splurge on increased rents. 

Shopper spending pullback

It kinds a broader development of shoppers pulling again on the whole. Everybody seems to be holding their breath, ready to see what comes subsequent. And in doing so, they’re spending much less and hoarding more money. 

Whereas it’s arduous to measure “vibes,” the Shopper Confidence Index fell 11.3% from June 2024 to June 2025. 

Implications for Earnings Buyers

Kapil Singla, an investor with Brilliant Future Dwelling Consumers in Birmingham, tells BiggerPockets that even slight hire drops imply tenants have extra negotiating energy and time to evaluate listings. “For traders, it’s a clear market sign to evaluate pricing, enhance unit attraction, and place your self as the best choice close by,” he provides.

I wrote earlier this month about cities the place dwelling costs are falling. Falling rents put much more downward stress on rental property costs, which creates room for negotiating deep reductions with determined sellers. 

“When rents soften, sellers get extra versatile, and patrons can safe higher offers,” provides Austin Glanzer of 717HomeBuyer in a dialog with BiggerPockets. “It’s a good time to scour for underpriced properties and add worth by renovations.”

That proves doubly true if you happen to imagine inflation will rear up once more as a consequence of incoming tariffs. Rental traders can lock in month-to-month mortgage funds in right this moment’s {dollars}, solely to have inflation drive rents up over the subsequent few years. 

James Heller with The Atlas Portfolio in Cincinnati recommends traders not simply hunt down nice offers however to additionally add income. “Search for properties with room for strategic upgrades,” he suggested when talking to BiggerPockets.

That might imply value-add renovations, in fact, nevertheless it may additionally imply including an ADU or splitting one property into two models. It may imply switching from a long-term rental to a short-term or medium-term rental or some different artistic method to generate extra earnings from the identical property. 

On the co-investing membership, we’ve vetted and invested in some group offers the place the operator added worth much more creatively. For instance, final month, we invested in two property tax abatement offers, the place operators partnered with native municipalities to put aside a share of the models for inexpensive housing. In alternate, they received a property tax abatement that immediately added six figures in web working earnings. 

What’s the Outlook for Future Rents?

The flood of recent rental models hitting the market over the past two years is about to ease. Yardi initiatives far fewer new models hitting the market in 2026 and 2027 than in 2022-2025. Likewise, CBRE sees the identical slowing of recent provide and retightening of rental markets. Take a look at their timelines for restoration for these main cities with destructive hire development:

Circling again to multifamily housing begins, they dropped to 316 in Could. 

Briefly, rents look like bottoming out proper about now nationwide. Zillow initiatives whole hire development in 2025 at 2.8% for single-family properties and 1.6% for multifamily. In the meantime, CBRE forecasts whole hire development at a 2.6% annual price by the tip of 2025.

Smooth rental markets create alternatives and bargains for traders. Within the co-investing membership, we proceed assembly each month to vet new offers and go into them collectively. It’s a core a part of my investing philosophy of dollar-cost averaging: I make investments $5,000 in a brand new actual property deal each single month. That helps me earn excessive returns over time, even when different traders hem and haw and fret over the headlines.  

Don’t count on rents to skyrocket like they did in 2022 and 2023, however don’t count on them to fall in most markets both. Steadily, the glut of provide will get absorbed over the subsequent two years, and most rental markets ought to stabilize by the tip of this yr. 

By all of it, I plan to maintain investing small quantities each month as yet one more member of an funding membership.