A Map of All 73 Cities Where Rents Have Dropped This Year

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Builders constructed practically 600,000 condo items final 12 months, setting a brand new file. That glut of latest provide, coupled with fears over commerce war-induced inflation and recession, has brought about rents to gradual, stall, and even drop in 2025. 

The truth is, 73 cities throughout the nation have seen rents fall within the first 5 months of the 12 months. Right here’s the place they’re, a deeper dive into what’s inflicting rents to fall, and the outlook for rents transferring ahead. 

Cities With Falling Rents

With a couple of exceptions, cities with falling rents have largely clustered within the Sunbelt, Northeast, and Midwest. 

Whereas all actual property is native, the nationwide pattern has definitely moved in renters’ favor. On its Hire Supervisor overview, Zillow now reveals the common hire nationwide has dropped by $30 over the past 12 months. 

Softening rental markets can ding buyers in different methods, too. Usually, property managers need to supply incentives to lure new renters and maintain occupancy robust. Whereas many of the multifamily investments we’ve gone in on by means of the co-investing membership have averted it, we’ve seen a few properties which have needed to increase incentives. 

For reference, listed here are the 20 cities the place rents have fallen probably the most in 2025:

Metropolis	Common Hire	2025 Hire Decline
1. Athens, OH	$802	-8.51%
2. The Villages, FL	$2,007	-7.21%
3. Sunbury, PA	$904	-6.73%
4. Pullman, WA	$1,436	-5.94%
5. Naples, FL	$2,833	-5.37%
6. Sevierville, TN	$1,736	-5.33%
7. Key West, FL	$3,887	-5.31%
8. Fond du Lac, WI	$1,045	-5.02%
9. Edwards, CO	$3,864	-4.24%
10. Bay Metropolis, MI	$1,240	-3.74%
11. Cortland, NY	$1,292	-3.71%
12. Georgetown, SC	$2,168	-3.52%
13. Mount Nice, MI	$1,120	-3.39%
14. Blacksburg, VA	$1,767	-3.36%
15. Freeport, IL	$793	-2.98%
16. Sizzling Springs, AR	$1,385	-2.83%
17. Clearlake, CA	$1,813	-2.82%
18. Lebanon, PA	$1,388	-2.81%
19. Hattiesburg, MS	$1,369	-2.72%
20. Mount Vernon, WA	$2,161	-2.42%

What’s Inflicting Rents to Drop?

Markets transfer in cycles, and rents surged after the pandemic, after remaining artificially locked on account of eviction moratoriums. That post-pandemic surge has slowed to a trickle in 2025, and a drought in many markets. 

Glut of latest provide

As touched upon, some markets acquired flooded with new rental stock. Housing begins for multifamily properties reached a month-to-month low of 233 in April 2020, at “peak pandemic panic.” Over the subsequent two years, they practically tripled to 615 by November 2022. 

A lot of these tasks accomplished in 2024 are coming onto the market now in 2025. 

Softening labor market

As of this writing, the newest Labor Division knowledge noticed the four-week transferring common of jobless claims attain the highest stage since August 2023. 

Fewer employers are hiring, and fewer staff are quitting. There’s a lot uncertainty within the economic system between commerce wars, tariffs, and wild public coverage swings in Washington, D.C. that employers and staff alike are treading fastidiously. 

Much less assured staff make extra conservative renters, who’re much less prepared to splurge on larger rents. 

Shopper spending pullback

It varieties a broader pattern of customers pulling again usually. Everybody seems to be holding their breath, ready to see what comes subsequent. And in doing so, they’re spending much less and hoarding more money. 

Whereas it’s exhausting to measure “vibes,” the Shopper Confidence Index fell 11.3% from June 2024 to June 2025. 

Implications for Revenue Traders

Kapil Singla, an investor with Brilliant Future Residence Patrons in Birmingham, tells BiggerPockets that even slight hire drops imply tenants have extra negotiating energy and time to evaluate listings. “For buyers, it’s a clear market sign to evaluate pricing, increase unit enchantment, and place your self as the best choice close by,” he provides.

I wrote earlier this month about cities the place dwelling costs are falling. Falling rents put much more downward strain on rental property costs, which creates room for negotiating deep reductions with determined sellers. 

“When rents soften, sellers get extra versatile, and patrons can safe higher offers,” provides Austin Glanzer of 717HomeBuyer in a dialog with BiggerPockets. “It’s a good time to scour for underpriced properties and add worth by means of renovations.”

That proves doubly true in case you consider inflation will rear up once more on account of incoming tariffs. Rental buyers can lock in month-to-month mortgage funds in immediately’s {dollars}, solely to have inflation drive rents up over the subsequent few years. 

James Heller with The Atlas Portfolio in Cincinnati recommends buyers not simply hunt down nice offers however to additionally add income. “Search for properties with room for strategic upgrades,” he suggested when talking to BiggerPockets.

That would imply value-add renovations, in fact, however it may additionally imply including an ADU or splitting one property into two items. It may imply switching from a long-term rental to a short-term or medium-term rental or some different artistic method to generate extra revenue from the identical property. 

On the co-investing membership, we’ve vetted and invested in some group offers the place the operator added worth much more creatively. For instance, final month, we invested in two property tax abatement offers, the place operators partnered with native municipalities to put aside a proportion of the items for inexpensive housing. In alternate, they acquired a property tax abatement that immediately added six figures in internet working revenue. 

What’s the Outlook for Future Rents?

The flood of latest rental items hitting the market over the past two years is about to ease. Yardi tasks far fewer new items hitting the market in 2026 and 2027 than in 2022-2025. Likewise, CBRE sees the identical slowing of latest provide and retightening of rental markets. Take a look at their timelines for restoration for these main cities with adverse hire progress:

Circling again to multifamily housing begins, they dropped to 316 in Might. 

Briefly, rents look like bottoming out proper about now nationwide. Zillow tasks complete hire progress in 2025 at 2.8% for single-family houses and 1.6% for multifamily. In the meantime, CBRE forecasts complete hire progress at a 2.6% annual fee by the tip of 2025.

Mushy rental markets create alternatives and bargains for buyers. Within the co-investing membership, we proceed assembly each month to vet new offers and go into them collectively. It’s a core a part of my investing philosophy of dollar-cost averaging: I make investments $5,000 in a brand new actual property deal each single month. That helps me earn excessive returns over time, even when different buyers hem and haw and fret over the headlines.  

Don’t anticipate rents to skyrocket like they did in 2022 and 2023, however don’t anticipate them to fall in most markets both. Progressively, the glut of provide will get absorbed over the subsequent two years, and most rental markets ought to stabilize by the tip of this 12 months. 

By way of all of it, I plan to maintain investing small quantities each month as yet another member of an funding membership.