After years of robust increases, U.S. single-family rental (SFR) growth slowed to a crawl in 2025, according to Rentometer’s annual report. After climbing 7.8% in 2022 and nearly 3% in 2023, annual rent growth cooled to 2.4% in 2024 and fell below 0.25% in 2025, reflecting a market grappling with elevated vacancies, slowing demand and affordability pressures.
The annual figure masks an intra-year swing in which rents rose roughly 1.7% in the first half of 2025, then turned negative in the second half, effectively erasing earlier gains. Still, most U.S. cities avoided declines, with rents generally flat or modestly higher. The median rent for a three-bedroom single-family home held at $2,100, largely unchanged year-over-year, according to Rentometer.
Regional trends varied. Pacific markets led growth at 3%, while the Midwest and Northeast fell below 2.5% and other regions remained mostly flat. State-level differences were notable. Eighty-nine percent of markets in Arizona, Florida and Texas had the highest shares of cities with flat or declining rents, compared with Illinois, Indiana and California, which had the lowest share.
Smaller cities and suburban markets outpaced larger urban centers. Among cities with over 250,000 residents, Chesapeake, Virginia, Lincoln, Nebraska and Staten Island saw the highest increases, while Dallas, Austin, Tucson and Glendale experienced the largest declines. Austin and Glendale posted negative growth for a second consecutive year, signaling localized market corrections.
The report noted that flat nominal rents have not kept pace with inflation, resulting in a contraction in real income for many investors. Conversely, households gained purchasing power, as wage growth began to outpace rent hikes, easing rental burdens for millions of families for the first time since the pandemic.
Elevated vacancy is a key factor. Single-family vacancy rates hit 6.3% in early 2025, the highest in nearly a decade and stabilized at 6.1% in Q3, still above recent historical norms. Slowing job growth, weakening consumer confidence and a wave of new multifamily supply have given renters alternatives to single-family homes, especially in markets facing affordability pressures.
Rentometer advised investors to exercise caution but identified an opportunity in smaller cities and suburban submarkets where demand remains resilient. Investors should focus on markets with limited new supply, strong fundamentals and growth-oriented local economies, while recognizing that macro headwinds may continue to suppress nominal rent growth in large, oversupplied metros, according to Rentometer.
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