After two years of declining or flat rates, rent is back on the rise across the U.S. as a shrinking supply might be enabling landlords to increase prices, according to a new report by Redfin.
The median asking rent climbed 1.7 percent—the equivalent of $30—in July compared to a year earlier, reaching $1,790. It was the largest increase since January 2023 and the second consecutive year-over-year increase of 2025 after the one reported in June, when rent rose 0.4 percent.
Renters Stuck Between a Rock and a Hard Place
The U.S. is going through a once-in-a-generation housing affordability crisis that has pushed homeownership out of reach for millions of Americans. As a result, the renting population has grown across the country, especially in suburban areas, as renting remains more affordable than buying almost everywhere in the nation.
But rental costs also surged during the pandemic, as low supply met surging demand. Even as they have been stabilizing and even falling since reaching their peak in mid-2022, rent prices remain much higher than they were before the COVID-19 health emergency.
American tenants are stuck between a rock and a hard place: nearly half of over 21 million renter households in the country have been cost-burdened, meaning they spent more than 30 percent of their income on housing costs in 2023, according to the U.S. Census Bureau. But buying a home is not an option, as prices remain sky-high, mortgage rates are still hovering between 6 percent and 7 percent, and other costs—including home insurance premiums and property taxes—are on the rise.
Why Rents Are Rising Again
Rents are rising because the supply of rental units across the country is shrinking, according to Redfin, and possibly shifting the power toward landlords.
“Asking rents may be climbing because shrinking apartment supply is coinciding with growing renter demand, which is being fueled by the high cost of homeownership,” said Redfin Senior Economist Sheharyar Bokhari in a press release.
“Rents have been sluggish for the past two years because the pandemic building boom created a surplus of supply, which left landlords scrambling to fill vacancies and gave renters negotiating power. But now a slowdown in apartment construction may be shifting the balance of power toward landlords.”
In some parts of the country, especially Florida and Texas, the rise in demand for rental units and homes during the pandemic sparked a construction boom that saw these states adding hundreds of properties to their market. But in the midst of the current slowdown in the U.S. housing market, due to dwindling demand, falling sales, and growing inventory, developers have been cutting back on new projects.
Permits to build multifamily housing (normally used for rental units) have fallen 23.1 percent since the pandemic construction boom, according to Redfin.
Where Rents Are Rising the Most
The biggest year-over-year increase in the nation was reported in San Jose, California, where the median asking rent jumped by 8.8 percent in July. Chicago, Illinois, followed with an 8.6 percent increase. It was trailed by Washington, D.C. (8.5 percent), Pittsburgh, Pennsylvania (7.7 percent) and Philadelphia, Pennsylvania (7.5 percent).
These metropolitan areas are seeing these huge increases because supply is shrinking. In San Jose, permits to build apartments in the city have fallen 74.5 percent since the pandemic, according to Redfin. In Philadelphia, permits fell by 62.1 percent. Curiously, Pittsburgh actually experienced one of the biggest increases, at 131 percent.
Rent fell year-over-year in July only in these metros where supply has risen the most in recent months. Jacksonville, Florida, reported the biggest decline at -3.5 percent, followed by Austin, Texas (-2.6 percent), Louisville, Kentucky (-2.4 percent), Cincinnati, Ohio (-1.7 percent), Phoenix, Arizona (-1.1 percent), Cleveland, Ohio (-1 percent), and Orlando, Florida (-0.2 percent).
Redfin
