As spring comes within whispering distance, the multifamily rental season heats up. According to Zillow’s February 2025 Rental Market Report, pricing power has returned to the property category with the typical asking rent across the U.S. having risen to $1,980, a 0.4% increase from January and 3.5% year-over-year. It is 0.5% below the pre-pandemic monthly average for this time of year.
Even with increased supply in some popular parts of the country, demand from new renters is keeping upward rent pressure in place. Multifamily unit rent growth has also passed that of single-family rentals for the first time since June 2024.
Recently, single-family rentals (SFRs) saw faster rental growth than multifamily because of limited supply and high demand. That has flipped back to more historical patterns between increased construction of single-family homes for rentals and a slowdown in the new apartment construction that had been the case over the last couple of years. However, SFRs have risen in price, with an average ask of $2,189, a 0.4% increase from January to February.
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Not all metros have seen increases. Cincinnati, for example, experienced a drop of 0.4% — the largest of all cities on the list. Buffalo was down by 0.2% and Jacksonville by 0.04%. And yet, rents in the other 47 of the 50 largest metros were up. The largest growth was in Hartford (7.8%), Cleveland (6.3%), Providence (6.3%), Chicago (5.7%), and Milwaukee (5.5%). Even with the increases, more than 41% of Zillow rental listings featured rent concessions, the same as in January, so they’ve reached a peak and the seasonal changes will likely come down.
According to Moody’s, the rent-to-income ratio has been falling for five quarters and fell to 27.6% in the last quarter of 2024. Zillow’s data suggest that things have turned around again in the first couple of months of 2025.
Before the pandemic, the median household needed 26.9% of its income to afford a typical rental. By February 2025, however, the same household needed 29.3% of its income for a rental, and that is after an increase in household income. The household income needed for a typical rental is up to $79,207.
Among the most affordable rental markets are Austin (19.4% of median household income), Minneapolis (19.9%), and Salt Lake City (20%). Among the least affordable metros are Miami (40%), New York (38.3%), and Los Angeles (36.8%).
As the results are a function of seasonal activity, as Zillow says, it may not sustain through later in the year.
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