Back in 2020 and 2021, we saw a surge in household formation, mostly related to roommates splitting up (spending too much time together!). This led to a surge in rents (heavy demand), and rising rents led to a pickup in rental housing starts.
Of course the 2021 surge in household formation was just pulling demand forward, and with more units coming on the market, and less household formation, rents have been soft for the last 3 years.
With fewer rental units coming on the market in 2026, it was possible vacancy rates would decline and rents might increase more than the previous 3 years. However, recent immigration policy will likely put downward pressure on rents this year since deportations have increased and legal immigration has decreased. So 2026 will likely be another year of soft rents.
Rents up 0.4% month-over-month, down 1.7% year-over-year
The national median rent increased by 0.4% in March, and now stands at $1,363. This marks the second consecutive monthly increase, as the market begins to pull out of its off-season pricing dip.
Rent prices nationally are down 1.7% compared to one year ago. Year-over-year rent growth is now at the lowest level that we’ve seen in our estimates going back to 2017, surpassing a record set in the early months of the pandemic. The national median rent has now fallen from its 2022 peak by a total of 5.5%.
The national multifamily vacancy rate held steady at 7.3% this month, a record high for our index going back to 2017. We’re past the peak of a multifamily construction surge, but a healthy supply of new units are still hitting the market and colliding with sluggish demand, causing vacancies to remain elevated.
Realtor.com: 30th Consecutive Month with Year-over-year Decline in Rents; Median Asking Rents at four-year low
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