Rent Is Falling, but It Still Costs Far More Than Before the Pandemic

Rent is cooling. That is the headline in market after market, and year over year it is true: prices have dipped in dozens of large cities as a wave of new apartments hits the market. But zoom out past the last 12 months and a different picture appears. The typical US rent is still about 36% higher than it was just before the pandemic, and a small recent dip barely dents that.

Across the cities RentDataNow tracks, the average rent has climbed from roughly $1,581 in January 2020 to about $2,157 now. That is the hole renters are actually trying to climb out of, and a year of modest declines does not come close to filling it.

Still up 30% to 55% since 2020

The five-year gains are steepest in the Sun Belt markets that are cooling fastest right now, which is the paradox of the moment. Here is how the typical rent has changed since January 2020 in a set of large cities:

Even the cities cooling fastest are far above 2020

Austin is the clearest example. Its rent has fallen over the past year as its apartment boom bit, and it is now one of the best relative bargains in the country. Yet a typical Austin rent is still 13% higher than before the pandemic. Tampa and Phoenix tell the same story more dramatically: both are cooling now, but both remain up 48% and 33% since 2020.

Why it does not feel cheaper

The math is simple. A market falling 3% or 4% in a year is shedding a sliver of a gain that ran 30% or more over five years. For a renter signing a lease, a small annual decline is welcome, but it lands on a base that reset far higher during 2021 and 2022 and never came back down. "Rent is falling" and "rent is affordable again" are two very different claims, and only the first one is true.

What to watch next

The question is whether the current softening is the start of a real correction or just a pause. In the Sun Belt, where construction is heaviest, there is room for rents to keep drifting toward their long-term trend. In supply-starved markets, the recent dip may prove shallow. Either way, the pre-pandemic price is not coming back soon.

Rents come from RentDataNow, anchored to the Zillow Observed Rent Index (ZORI); changes compare January 2020 to the latest month.