U.S. Asking Rents Rise 2.6%: Chicago Leads Metro Increases as Austin Declines

The median U.S. asking rent increased by 2.6% year-over-year to $1,790 in August, marking the largest annual gain since December 2022. This rise is primarily driven by strong demand, fueled by high homebuying costs, and a cooling supply of new apartment constructions. Among major metropolitan areas, Chicago saw the most significant jump at 10.7%, while Austin, Texas, led the few declining markets with a 3.1% drop.

Why Are Rents Rising Across the U.S.?

The median asking rent—the middle point of all listed rental prices—has risen for three consecutive months after a nearly two-year period of stagnation or decline. This shift is attributed to a fundamental change in market dynamics. Demand remains robust as many individuals are priced out of the for-sale market, while the supply of new rental units is slowing. According to Redfin Senior Economist Sheharyar Bokhari, "Apartment construction boomed during the pandemic, but many of those projects have since wrapped up and fewer new ones are breaking ground." High financing costs, elevated construction expenses, and weaker investor appetite are causing builders to pull back.

The data supports this: the number of new apartments being completed fell to a seasonally adjusted annual rate of 385,000 in July, a 45.4% decrease from an August 2024 peak of 705,000. With fewer new options, renters have less leverage, and landlords are regaining pricing power, which may lead to a reduction in concessions like free parking or reduced rent.

Which Metros Saw the Largest Rent Increases and Decreases?

An analysis of 42 major core-based statistical areas (CBSAs)—geographic units defined by the U.S. Office of Management and Budget that include a central city and surrounding communities—revealed stark regional differences.

• Chicago, IL: +10.7% ($2,275 median rent)
• San Jose, CA: +10.6%
• Philadelphia, PA: +9.9%
• Pittsburgh, PA: +9.8%
• Washington, D.C.: +8.7%

In contrast, only three metros saw year-over-year declines in August:

• Austin, TX: -3.1%
• Louisville, KY: -2.4%
• Jacksonville, FL: -1.9%

This divergence highlights how local economic conditions, job growth, and the pace of new construction can create vastly different rental markets.

How Do Rent Changes Vary by Apartment Size?

The rent increases were not uniform across different unit types, impacting budget-conscious renters the most. The median asking rent for smaller, typically more affordable apartments saw the sharpest increase.

The 4.4% jump for 0-1 bedroom units is the largest since September 2022. The stability of rents for 3+ bedroom units suggests that demand pressure is concentrated in the more affordable segment of the market.

What Does This Mean for Renters?

Based on our experience assessment, the current trends suggest a more challenging environment for renters in the coming months. The slowdown in new construction is a critical factor that will likely sustain upward pressure on rents nationally. While seeking concessions from landlords may have been effective during the supply glut, that strategy may become less successful. For those planning a move, researching local market conditions is more important than ever, as performance varies significantly by metro. Renters should be prepared for the possibility of higher costs upon lease renewal, especially in markets with strong growth like Chicago and San Jose.