2025 May Be the Best Time to Rent but It Won’t Stay That Way

Renters should take advantage of the current favorable rental market conditions, as experts caution that this trend may not persist for long. While rental prices have eased in recent months, various economic and market forces suggest that affordability may be short-lived.

As of December, the median asking rent in the U.S. was $1,695, reflecting a slight decrease of 0.5% from the previous month, equating to an $8 reduction. Compared to a year earlier, rents have fallen by 1.1%, or approximately $18, and are down 3.7% from the peak levels recorded in July 2022, according to a report by Realtor.com. This decline has largely been driven by an increase in newly constructed apartments, which has expanded the supply of rental units. With more available housing, some property owners are reducing asking prices to attract tenants.

“We’re calling it a renter’s market. We think that’s going to continue for the next year,” Daryl Fairweather, chief economist at Redfin, recently told CNBC. The increase in apartment construction has temporarily shifted market conditions in favor of renters, providing them with more negotiating power and better affordability.

The Changing Rental Landscape

Despite the current dip in rental prices, experts warn that these conditions may not last. The National Association of Home Builders (NAHB) projects a 20% decline in multifamily housing starts in 2024, following a 14% decrease in 2023. With fewer new rental units entering the market, the supply-demand balance is likely to shift again, potentially driving rental prices back up.

“This construction boom is probably going to be over and rents will probably start going up again,” Fairweather said.

Several factors contribute to the slowdown in multifamily construction. One major issue is that, with rental prices declining, building new multifamily properties is currently less profitable. Developers are also facing increased costs due to economic uncertainty, rising interest rates, and shifting government policies. Tariffs on essential building materials such as lumber and steel, along with labor shortages, have added to the financial challenges for construction firms.

“We’re seeing multifamily construction permitting slowing a bit,” said Joel Berner, a senior economist at Realtor.com. “With rent prices coming down, it’s not economically viable to build multifamily housing at the moment.”

Another significant concern is the potential impact of immigration policies on the construction workforce. Immigrants make up a substantial portion of the U.S. construction industry—about 31% of construction tradesmen in 2022, according to NAHB. Any policy changes that disrupt the availability of immigrant labor could drive up labor costs, making housing development even more expensive and slowing new construction further.

How Renters Can Maximize Opportunities

Given the uncertain future of rental affordability, tenants should take strategic steps to secure favorable leasing terms while the market remains in their favor. Here are three key recommendations:

1. Lock in a Multiyear Lease If you're in an area where rents are declining, consider negotiating a multiyear lease with your landlord. In exchange for a longer commitment, landlords may be willing to offer a lower rental rate. Additionally, offering incentives such as flexible lease terms or a higher security deposit could strengthen your negotiation position. Tenant turnover is costly for landlords, so securing a stable, long-term tenant can be mutually beneficial.

2. Save for Homeownership “If you’re a renter who intends to become a homeowner, this is a good time to save on rent,” Berner said. If you can reduce your rent costs, allocate the savings toward a future down payment. Many renters struggle to transition into homeownership due to high living costs, but with builders shifting their focus to the single-family housing market, there may be more affordable homeownership opportunities in the coming years. According to Realtor.com, single-family housing starts are expected to increase by 13.8% in 2025, reaching approximately 1.1 million new homes.

3. Explore Affordable Housing Markets While it may not be practical to move solely for lower rent, keeping an eye on more affordable housing markets can be a smart strategy if relocation is already on your radar. Certain metropolitan areas offer better affordability based on local wages and rental costs. For instance, Austin, Texas, has been ranked as one of the most affordable metros by Redfin, with the typical renter earning about 25% more than the estimated income needed to afford a median-priced rental unit in the area. Being aware of such trends can help renters make informed decisions about future housing plans.

The Bottom Line

Although renters are currently benefiting from a temporary dip in rental prices, this trend is unlikely to last indefinitely. With construction of new multifamily housing slowing, supply may tighten, leading to rising rental costs in the near future. By taking proactive steps—such as securing a favorable lease, saving for homeownership, and staying informed about affordable housing markets—renters can position themselves for long-term financial stability, regardless of how the market evolves.

If you're looking to make the most of your financial opportunities, now is the time to invest wisely. Partner with us to navigate the changing market and achieve your financial goals with expert guidance and tailored investment solutions. Contact us today to get started.