Rents Surge Across the U.S. as Apartment Construction Slows

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Asking rents climbed 3% in August as slowing supply and robust demand gave landlords more bargaining power. In August, the national median asking rent climbed to $1,790, up 2.6% from a year earlier—the steepest increase since the end of 2022—and now sits just $70 under its all-time peak. August also marked the third consecutive month of year-over-year increases after nearly two years of stagnant or falling rents.

Why Rents Are Rising Again

Rental prices are climbing as strong demand—driven in part by the high cost of buying a home—meets a slowdown in available supply. During the pandemic, apartment construction surged, but that momentum has faded. During the pandemic, apartment development surged, but much of that pipeline is now complete, and far fewer projects are starting,” explained Redfin Senior Economist Sheharyar Bokhari. Developers face high financing costs, elevated building expenses, and weaker investor appetite, leaving fewer new rental options for tenants.

In July, the number of new apartments completed dropped to a seasonally adjusted annual rate of 385,000—down 45.4% from the August 2024 peak of 705,000. With fewer permits being issued and new projects on pause, the rental supply squeeze is expected to continue.

Metro-Level Shifts: Chicago Up, Austin Down

The rental surge isn’t uniform nationwide. Chicago posted the largest increase in rents, up 10.7% year over year to $2,275. San Jose, Philadelphia, Pittsburgh, and Washington, D.C. also saw steep gains. Meanwhile, only three metros experienced rent declines: Austin (-3.1%), Louisville (-2.4%), and Jacksonville (-1.9%).

Smaller Units See the Biggest Price Gains

Studio and one-bedroom apartments are leading the rent surge. The median asking rent for 0–1 bedroom apartments jumped 4.4% to $1,650 in August. Two-bedroom units followed with a 3.6% increase to $1,920. Even larger apartments stabilized, with 3+ bedroom rents holding flat at $2,199 after several months of declines.

Bottomline

With rents climbing again, renters face a more competitive market, and landlords are regaining leverage. For those considering a move, especially in high-demand regions like Orange County, now is the time to weigh your options carefully. Whether you’re renting, buying, or selling, Whitestone Real Estate is here to help you navigate the market and secure the best outcome. If you’re thinking about making Orange County your home—or making a move within the area—let’s connect and discuss your next steps.

Reference: Katz, L. (2025, September 9). U.S. asking rents rise most since 2022 as apartment construction slows. Redfin News.