As mid‑July unfolds, the U.S. rental market is experiencing a familiar summer slowdown in year-over-year rent growth, yet key metropolitan areas remain overheated. While national averages reflect a modest chill, locales like Austin and Miami continue to witness double-digit rent increases. Experts suggest that a surge in inventory—especially in Sun Belt regions—is easing pressure, though premier units in high-demand pockets are holding firm.
Following a frenetic period of rent hikes through 2023 and early 2024, 2025 has brought a clear shift. Data from Zillow indicates that rent growth has noticeably slowed this summer, settling closer to or even below long-term averages. In the single-family rental segment, national year-over-year rent growth registered a modest 1.7% for the first half of the year—up from 0.7% in 2024 but still trailing inflation. This deceleration aligns with vacancy rates rising to a multi-year high of around 6.3%.
A significant factor in this easing is the wave of new construction, particularly across Sun Belt metros. In the first quarter of 2025 alone, more than 133,000 new multifamily units were delivered nationally—exceeding net move-ins for the first time since early 2021. These new completions have helped temper rent growth, especially in regions like Austin, Phoenix, and Dallas where supply has swollen.
Within the Sun Belt, results vary. Austin, once a poster child for runaway rent growth, has transitioned into a cooling market. Apartments.com reports rent declines for eight consecutive quarters, and Denver joins Austin as one of only two markets outside the Sun Belt with falling rents—down 3.3% in the second quarter. Austin’s rent contraction, as sharp as 4.8% annually, is rooted in a surge of new units that outpaced demand.
Despite this, not all Sun Belt markets lag. Miami remains a rental hot spot. According to RentCafe’s Rental Competitiveness Index, Miami remains the nation’s most competitive market, holding an index score of 96.7—22 points above the national norm. In the Miami metro area, although inventory grew by roughly 17% year‑over‑year with over 24,300 units under construction in June, vacancy is still at a relatively modest 6%, undercutting many Sun Belt peers. Renters in sectors such as Portland, suburban Chicagoland, Houston, and Phoenix are facing varying affordability shifts, but none approach Miami’s intensity.
At landlord and investor conferences, analysts highlight that not all units are affected equally. Luxury-class apartments or those in elite submarkets—near major universities, tech campuses, or vibrant downtowns—continue to command strong growth. According to Harvard’s Joint Center for Housing Studies, even as market-wide rent increases have slowed to near zero, Class‑A rental properties are still experiencing modest but positive rental gains.
Berkadia and other real estate platforms warn landlords to manage leasing velocity carefully. Vacant units—even briefly—can be costly. With the inventory boom behind us, slowing construction pipelines could soon shift the balance back toward landlords. In populated markets with quality stock, absorption remains robust as renters opt to stay put given high mortgage rates and sticky home market prices.
Meanwhile, the Midwest and Northeast are emerging from the rental cool-down earlier than coastal and Sun Belt regions. Rentometer notes that single-family rents in the Midwest jumped 6.1%, the highest regional growth in the first half of 2025, while the Northeast saw a 4.6% rise. Markets like Kansas City, at about 3.5% growth, are overtaking places like Austin in landlord-friendliness.
This shift suggests a rebalancing as renters gravitate toward more affordable metro areas while staying in place becomes financially preferable to buying—a pattern supported nationally by rising rent burdens and limited purchasing power.
Looking ahead, analysts expect national rent growth to remain mild—around 3–4% through 2025—just above inflation. For Sun Belt markets, while inventory growth slows, rent growth is likely to resume—though perhaps more modestly than previous years.
Yet, pockets of exceptional demand in Austin’s premium enclaves, tech-driven regions, and vibrant coastal cities could outperform this baseline. Landlords with quality assets and strategic pricing stand poised to benefit in localized hot zones, even while broader seasonal cooling persists.
Renters should be aware that while nationally rates are stabilizing, premiums persist in hotspots. Those in luxury or amenity-rich submarkets may still face stiff competition—especially in Miami, select Austin neighborhoods, and parts of the Northeast. Landlords and investors are advised to focus on leasing velocity and high‑quality inventory. As construction wanes, the cycle may swing back toward a landlord-favored environment later in 2025. For policymakers, cooling trends provide breathing room for affordability, but rising absorption and future rent pressure could reignite calls for housing supply expansion.
Overall, the rental market is entering a more balanced phase—but with robust opportunities and persistent heat in key areas. Stakeholders who pay attention to submarket nuances will be best positioned to navigate the cool-down’s complexities.