SEATTLE, WA — The rental market is undergoing a significant shift. More new multifamily homes were completed in June than in any other month in the last 50 years. This construction boom is providing much-needed relief to renters as the pace of rental growth slows, new data from Zillow® shows.

The share of rental listings offering perks like free weeks of rent or free parking rose to 33.2% in July, up slightly from 33% in June and a significant jump from 25.4% a year ago. These incentives are becoming more common, especially in cities like Raleigh, Charlotte and Atlanta, where over half of rental listings offer perks.

“Builders have built an incredible number of apartments in response to rising rents during the pandemic, and renters are now reaping the benefits,” said Skylar Olsen, chief economist at Zillow. “Now is a great time for renters to snap up a bargain, with more new apartments coming onto the market than at any time in decades.”

The rental market has been relatively favorable for apartment renters over the past two years. While multifamily rents are still rising (up 5.1% since July 2022), this growth is in line with historical norms and is a welcome change after the staggering 22.3% increase over the past two years. Monthly rent growth for multifamily properties also slowed in July for the second month in a row.

Renters have received more concessions over the past two years. The share of rental listings on Zillow offering at least one concession hit a 29-month low of 19.4% in July 2022. That share has increased significantly since then, peaking at 33.6% in April.

More than half of the rental listings on Zillow offer a concession in six major metropolitan areas: Raleigh (53.3%), Charlotte (53%), Atlanta (52.2%), Salt Lake City (50.9%), Nashville (50.8%), and Austin (50.5%). Conversely, four major metropolitan areas have a lower share of listings with a concession than last year, indicating a more competitive rental market in those areas. These metropolitan areas include San Jose (-9.7 percentage points), Baltimore (-5.6), Milwaukee (-1.8), and Pittsburgh (-0.2).

A major reason for the rental market’s slowdown is the boom in multifamily construction, which is creating new rental options and rebalancing supply and demand. Nearly 60,000 multifamily homes were completed nationwide in June, the highest number in half a century.

The supply boom is still ongoing, but may have peaked. The number of multifamily homes under construction remains high, but has been declining for eight months in a row. Before this recent increase, the last time this many housing units were built was in 1973.

The rental vacancy rate, another measure of market tightness, remained at 6.6% in the second quarter of this year, where it has remained unchanged for the past four quarters. This is the highest rate since winter 2021.

Current trends suggest that renters will continue to benefit from a more balanced market. If the job market holds up and mortgage rates continue to fall, rents could continue to fall, giving renters even more opportunities to find bargains and concessions.

As the market continues to evolve, renters should stay informed of new developments and be prepared to take advantage of the increasing availability of rental units and the growing trend of concessions. The future looks bright for renters looking for better deals and more favorable lease terms.

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