As the rental market continues to cool, property managers are increasingly offering concessions to attract renters, according to new data from Zillow. The post-pandemic surge in apartment construction has given renters more options, leading to a softening in rent growth and an uptick in special deals.
In June 2024, the number of completed multifamily units reached a 50-year high, with nearly 60,000 new units coming available. This influx of new apartments is providing much-needed relief for renters, who have faced steep rent hikes in recent years. As a result, the share of rental listings offering concessions—such as free weeks of rent or complimentary parking—rose to 33.2% in July, up from 33% in June and 25.4% a year earlier.
“Builders have stepped up and built an incredible number of homes in response to soaring rents during the pandemic, and renters are now seeing the benefits,” said Zillow Chief Economist Skylar Olsen. “Now is a great time for renters to find a deal, with more new apartments hitting the market than at any time in the past several decades. Rents are still growing, but it’s a far cry from the steep rent hikes of two or three years ago.”
While rents have continued to rise—up 5.1% since July 2022—the pace of growth has slowed significantly, aligning more closely with historical norms. This comes as a welcome change for renters, who endured a staggering 22.3% rent increase over the previous two years. Monthly rent growth for multifamily units slowed in July for the second consecutive month, reflecting a broader trend of market stabilization.
Concessions have become more prevalent in recent months, with the share of listings offering at least one concession climbing to 33.6% in April, the highest level in nearly two and a half years. This trend is particularly pronounced in six major metro areas, where more than half of rental listings include a concession. These cities include Raleigh (53.3%), Charlotte (53%), Atlanta (52.2%), Salt Lake City (50.9%), Nashville (50.8%), and Austin (50.5%).
However, not all markets are experiencing the same level of cooling. In San Jose, Baltimore, Milwaukee, and Pittsburgh, the share of listings with concessions has decreased compared to last year, indicating a more competitive rental market in those areas.
The cooling of the rental market can be attributed, in part, to the surge in multifamily construction, which has rebalanced the supply-demand equation. Despite the continued construction activity, the number of new units being built has decreased for the past eight months, suggesting that the boom may have reached its peak.
The rental vacancy rate, another key indicator of market conditions, held steady at 6.6% in the second quarter of 2024, marking the fourth consecutive quarter at this level. This is the highest vacancy rate since the winter of 2021, signaling a shift towards a more balanced rental market.
As the rental landscape evolves, platforms like Zillow are playing a crucial role in connecting renters with available concessions. The platform’s “Special Offers” tab allows renters to easily find properties offering incentives, helping them make more informed housing decisions.
For renters, this current market environment presents a unique opportunity to secure better deals and take advantage of the increased availability of new apartments. With more units coming online and concessions becoming more common, renters have more bargaining power than they’ve had in years.
Click here for a full list of statistics for top metropolitan areas.
