Renters Benefit from Increased Apartment Supply, But Location Matters

On June 4, Chloe Troub stood with her boyfriend, Carson McDonald, feeling frustrated by the notion of a ‘renter’s market.’ Rent prices remain a significant burden. In Nashville, apartment-seekers like Mason Comans encountered landlords eager to make deals. A property manager offered one month free, while another offered two. Some even extended to three and a half months free.

Zillow’s Senior Economist, Kara Ng, claims this is a great time for renters. The typical rent increase was just 1.9% year over year in April, slower than inflation. Consumer prices rose 4.2% in the same period. Realtor.com data revealed a 1.5% decline in rent. Furthermore, 39.8% of Zillow rentals included promotions in April, like waived fees or free rent. Ng sees these incentives providing economic relief to families managing other costs.

Location plays a crucial role in rental prices. An apartment construction surge boosted supply. In 2024, 600,000 new units were built, the most in 38 years. This outpaced demand, reaching a 12-year high vacancy rate of 7.3% at the year’s start.

Sun Belt cities such as Nashville, Phoenix, and Austin saw a construction boom. Property managers in these areas often offer perks to attract renters. Ng noted numerous apartments entering the market simultaneously. The strategy includes offering added benefits to new renters.

However, Chloe Troub of Chicago disagrees with the renter’s market label. Chicago faced significant challenges, with a 5.4% rent increase in April. Troub and her boyfriend rent a one-bedroom for $1,600, considered a good deal. While searching for larger apartments, she encountered a $2,000 sublet, which would negate her partner’s last raise. Despite her hesitation, the subletter expected to find interest from others quickly.

There are additional considerations for renters. Move-in incentives eventually end. Michelle Becker from Adaro Realty in Nashville warns that rent hikes resume once commitments are secured. Comans, who moved four times in five years to benefit from incentives, found a one-bedroom with amenities and two and a half months of free rent. He knows moving would be necessary for similar offers in the future.

Additionally, average rents increased 36.9% since the pandemic began, according to Zillow. Although Comans gained initial savings, his $1,800 rent is still high. “It’s significant,” he said. “It’s not inexpensive.”