On The Market “Encouraging” Signs for Rents Are Already Emerging
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Jul 17, 2025 Lu Chen, a Senior Economist at Moody's with expertise in commercial real estate, joins the conversation about the changing landscape of rental affordability. Discussion centers on surprising trends in multifamily supply and demand, revealing improving conditions for renters as median rents regress to pre-pandemic levels. Regional differences in rental trends, particularly in the Sunbelt, highlight emerging investment opportunities. Chen also explores how demographic shifts and economic factors will shape future rental growth.
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Rental Affordability Nears Pre-Pandemic
- Rental affordability in the US is nearing pre-pandemic levels due to significant supply increases in multifamily housing.
- Rent growth has slowed substantially, easing pricing pressure on American renter households.
Single-Family Market Shifts
- Single-family home prices have stopped appreciating strongly, causing renters to stay longer and increasing the average age of first-time homebuyers.
- This inventory increase may loosen prices and provide renters with more options soon.
Stable Rent Growth Despite Supply Boom
- Despite increased housing supply, rent prices are not falling because steady demand, supported by strong labor and population factors, sustains slight rent growth.
- Rent growth projections for 2025 have been lowered but remain positive, slightly under 2.5% year-over-year.