Apartment Rents Plummet: Lowest in 4 Years
- Rent growth across the United States is decelerating, with some cities experiencing faster increases than others, amid broader economic concerns.
- Virginia Beach, Virginia, currently leads the nation in rent growth, experiencing a 5% increase as of January 2026.
- This growth is followed by San Jose and san Francisco, California; Chicago, Illinois; and Providence, Rhode Island.
US Rent Growth Slows, Uncertainty Looms
Table of Contents
Rent growth across the United States is decelerating, with some cities experiencing faster increases than others, amid broader economic concerns. Recent data indicates a shift in market dynamics as new construction slows and labor market conditions become less certain.
Rent growth Leaders – January 2026
Virginia Beach, Virginia, currently leads the nation in rent growth, experiencing a 5% increase as of January 2026.
This growth is followed by San Jose and san Francisco, California; Chicago, Illinois; and Providence, Rhode Island. While these cities are seeing increases, the pace is generally slower than Virginia Beach’s.
According to the Bureau of Labor Statistics’ Consumer Price Index (CPI), shelter costs, including rent, contributed considerably to overall inflation in recent years, though the rate of increase has begun to moderate.
Cities with Declining Rent Growth
Several cities are experiencing a slowdown in rent growth, including San Antonio, Texas; Tucson, Arizona; and Denver, colorado.
Data from Zillow Research indicates that Denver, such as, saw a peak in rent growth in early 2023, followed by a period of stabilization and, in some months, slight declines. As of December 2025, Denver’s year-over-year rent growth was reported at 1.8%.
- San Antonio, Texas: Rent growth is slowing due to increased housing supply.
- Tucson, Arizona: Demand has cooled as affordability concerns rise.
- Denver, Colorado: New apartment construction has outpaced demand in certain submarkets.
Factors Influencing Rental Market conditions
The slowing pace of new construction is a key factor impacting rental market conditions.
According to a report by the National multifamily Housing Council (NMHC), multifamily construction starts have decreased in recent quarters, signaling a potential shift in supply dynamics. The NMHC reported 48,437 units started in Q3 2025, a 23% decrease year-over-year.
However, rental demand is also becoming more uncertain due to a weakening labor market and broader economic concerns. The Bureau of Economic Analysis reported a GDP growth rate of 2.5% in Q4 2025, down from 3.4% in Q3 2025,indicating a potential economic slowdown.
As stated by Salviati, “The wave of construction that has been driving these conditions is waning, but whether or not market conditions shift will now depend on rental demand, whose outlook has grown shakier due to weakness in the labor market and general economic uncertainty.”
Impact of Labor Market on Rental Demand
A strong labor market typically supports rental demand, as more people have the income to afford rent.
Conversely, a weakening labor market can lead to decreased demand, as people may move in with family, downsize, or delay forming households.The U.S. Department of Labor reported an unemployment rate of 3.9% in December 2025, a slight increase from 3.7% in November 2025.