Press releases

One-third of property managers are offering concessions as rental market cools

Aug 12, 2024

An apartment construction boom is giving renters more options and better deals

  • More new multifamily units were completed in June than in any month in the past 50 years.
  • More than half of rentals are offering a concession in Raleigh, Charlotte, Atlanta, Salt Lake City, Nashville and Austin.
  • The rental vacancy rate held steady at 6.6%. The last time a higher share of rentals sat empty was winter 2021.

SEATTLE, Aug. 12, 2024 /PRNewswire/ -- More property managers offered concessions on their rentals in July as rent growth slowed, new data from Zillow® reveals. The post-pandemic construction frenzy continues to help soften rent growth. More new multifamily units were completed in June than in any month since the 1970s.

The share of rental listings on Zillow offering a concession — a sweetener such as free weeks of rent or free parking offered as an incentive to rent — climbed to 33.2% in July. That's up slightly from 33% in June and 25.4% a year earlier.

"Builders have stepped up and built an incredible number of homes in response to soaring rents during the pandemic, and renters are now seeing the benefits," said Zillow Chief Economist Skylar Olsen. "Now is a great time for renters to find a deal, with more new apartments hitting the market than at any time in the past several decades. Rents are still growing, but it's a far cry from the steep rent hikes of two or three years ago, and renters will find sweeteners being offered by more than half of rentals in some places. A slowing job market and lower mortgage rates could mean falling rents if the current trends hold."

The past two years have been fairly friendly for apartment renters. While multifamily rents are still rising, up 5.1% since July 2022, that pace is in line with historic norms and welcome relief for renters after an astounding 22.3% increase in the previous two years. Monthly rent growth for multifamily units slowed in July for the second month in a row.

Renters have enjoyed concessions more often during the past two years, as well. The share of rental listings on Zillow offering at least one concession was at a 29-month low in July 2022 at 19.4%. That share has climbed considerably since then, peaking at 33.6% in April.

More than half of rental listings on Zillow are offering a concession in six major metro areas: Raleigh (53.3%), Charlotte (53%), Atlanta (52.2%), Salt Lake City (50.9%), Nashville (50.8%) and Austin (50.5%). Four major metros have a smaller share of listings with a concession than last year, indicating a more competitive rental market. Those are San Jose (-9.7 percentage points), Baltimore (-5.6), Milwaukee (-1.8) and Pittsburgh (-0.2).

One reason for the rental market cooldown is a multifamily construction frenzy that is opening up new options for renters and rebalancing the supply and demand seesaw. Almost 60,000 multifamily units were completed nationwide in June — the latest data available — which is more than in any month in half a century.

The supply boom still has legs, but it may have hit its peak. While there are still a huge number of multifamily units under construction — before this recent boom, 1973 was the last time this many units were being built —that number has fallen in each of the past eight months.

The rental vacancy rate, another measure of market tightness, held steady at 6.6% in the second quarter of this year, where it has sat for the past four quarterly readings. That's the highest since winter 2021.

Zillow provides a user-friendly platform for housing providers to share concessions information with prospective renters. Property managers can easily list concessions for their properties, and renters can find all available offers under the "Special Offers" tab on participating buildings' detail pages, enabling them to make well-informed housing decisions.

 

Metropolitan
Area*

Typical Rent,
Multifamily
Units, Zillow
Observed
Rent Index
(ZORI)

Multifamily
ZORI
Change,
Month Over
Month
(MoM)

Multifamily
ZORI Change,
Year Over
Year (YoY)

Listings With a
Concession

Concessions
Change, MoM
(Percentage
Points)

Concessions
Change, YoY
(Percentage
Points)

United States

$1,916

0.4 %

2.6 %

33.2 %

0.2 ppts

7.8 ppts

New York, NY

$3,448

0.6 %

3.4 %

15.9 %

0.4 ppts

3.9 ppts

Los Angeles, CA

$2,751

0.5 %

2.0 %

30.2 %

1.7 ppts

2.8 ppts

Chicago, IL

$2,042

0.4 %

4.4 %

24.9 %

2.5 ppts

8.1 ppts

Dallas, TX

$1,605

0.2 %

-1.4 %

47.6 %

-1.1 ppts

10.3 ppts

Houston, TX

$1,511

0.1 %

0.8 %

35.4 %

-0.6 ppts

5.7 ppts

Washington, DC

$2,351

0.7 %

4.4 %

47.4 %

0.6 ppts

2.5 ppts

Philadelphia, PA

$1,803

0.4 %

3.2 %

30.2 %

1.7 ppts

8.3 ppts

Miami, FL

$2,558

0.1 %

2.6 %

17.4 %

-0.1 ppts

4.3 ppts

Atlanta, GA

$1,740

0.0 %

-1.4 %

52.2 %

-0.2 ppts

14.5 ppts

Boston, MA

$3,057

0.2 %

4.2 %

21.7 %

2 ppts

7.1 ppts

Phoenix, AZ

$1,624

-0.2 %

-0.3 %

50.1 %

0.3 ppts

9.6 ppts

San Francisco, CA

$2,862

0.2 %

0.5 %

38.6 %

-0.4 ppts

0.7 ppts

Riverside, CA

$2,345

0.2 %

2.2 %

19.1 %

-2.3 ppts

1.7 ppts

Detroit, MI

$1,374

0.6 %

4.8 %

23.3 %

2.5 ppts

1.5 ppts

Seattle, WA

$2,119

0.5 %

3.1 %

44.2 %

1 ppts

12.1 ppts

Minneapolis, MN

$1,587

0.1 %

2.3 %

49.8 %

-0.2 ppts

10.9 ppts

San Diego, CA

$2,795

0.4 %

0.1 %

34.3 %

1.4 ppts

12.4 ppts

Tampa, FL

$1,844

0.3 %

0.3 %

42.0 %

1 ppts

13.9 ppts

Denver, CO

$1,911

0.3 %

1.3 %

48.9 %

0.8 ppts

14.1 ppts

Baltimore, MD

$1,793

0.5 %

2.7 %

32.7 %

-2.2 ppts

-5.6 ppts

St. Louis, MO

$1,314

0.9 %

3.9 %

21.6 %

-3.1 ppts

3.8 ppts

Orlando, FL

$1,876

0.2 %

-0.3 %

38.7 %

0.1 ppts

8.6 ppts

Charlotte, NC

$1,616

0.5 %

-0.8 %

53.1 %

-2 ppts

15.7 ppts

San Antonio, TX

$1,308

-0.1 %

-1.1 %

46.4 %

-2.4 ppts

12.3 ppts

Portland, OR

$1,740

0.6 %

2.9 %

43.5 %

3.1 ppts

6.3 ppts

Sacramento, CA

$2,051

0.0 %

2.5 %

29.3 %

1.8 ppts

5.6 ppts

Pittsburgh, PA

$1,380

0.6 %

3.8 %

21.8 %

-0.5 ppts

-0.2 ppts

Cincinnati, OH

$1,379

0.3 %

4.0 %

20.0 %

1.6 ppts

5.7 ppts

Austin, TX

$1,601

-0.3 %

-4.5 %

50.5 %

0.9 ppts

14.1 ppts

Las Vegas, NV

$1,557

-0.02 %

2.2 %

39.4 %

-0.1 ppts

2.5 ppts

Kansas City, MO

$1,338

0.4 %

4.9 %

26.7 %

-2.6 ppts

7.9 ppts

Columbus, OH

$1,426

0.6 %

3.3 %

34.4 %

-1.3 ppts

10.5 ppts

Indianapolis, IN

$1,380

1.0 %

2.4 %

33.2 %

0.6 ppts

8.8 ppts

Cleveland, OH

$1,361

0.4 %

6.5 %

23.1 %

-0.3 ppts

4.6 ppts

San Jose, CA

$3,212

0.9 %

2.7 %

33.6 %

3.1 ppts

-9.7 ppts

Nashville, TN

$1,742

0.2 %

0.2 %

50.8 %

0.5 ppts

11.1 ppts

Virginia Beach, VA

$1,589

0.9 %

5.0 %

28.6 %

-1 ppts

10.7 ppts

Providence, RI

$2,006

0.9 %

7.0 %

13.6 %

-1.4 ppts

6 ppts

Jacksonville, FL

$1,537

-0.1 %

-1.4 %

45.6 %

-0.2 ppts

17.8 ppts

Milwaukee, WI

$1,299

0.5 %

4.8 %

17.1 %

-1.5 ppts

-1.8 ppts

Oklahoma City, OK

$1,108

1.2 %

3.1 %

23.8 %

3.3 ppts

11.1 ppts

Raleigh, NC

$1,557

0.3 %

-2.4 %

53.3 %

1.8 ppts

14.7 ppts

Memphis, TN

$1,299

0.1 %

2.8 %

25.8 %

-0.2 ppts

9.8 ppts

Richmond, VA

$1,579

0.9 %

5.1 %

38.5 %

1.5 ppts

4.9 ppts

Louisville, KY

$1,304

0.2 %

6.2 %

30.4 %

5.3 ppts

11 ppts

New Orleans, LA

$1,544

0.2 %

3.5 %

10.1 %

-0.7 ppts

2 ppts

Salt Lake City, UT

$1,571

0.3 %

1.7 %

50.9 %

-1.7 ppts

6.7 ppts

Hartford, CT

$1,779

0.6 %

8.3 %

23.3 %

-0.7 ppts

9.5 ppts

Buffalo, NY

$1,339

0.9 %

5.0 %

N/A

N/A

N/A

Birmingham, AL

$1,315

0.4 %

-0.7 %

36.3 %

7.2 ppts

12.8 ppts

*Table ordered by market size 

 

About Zillow Group
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated partners and agents, and easier buying, selling, financing and renting experiences.

Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Zillow Rentals®, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce® and Follow Up Boss®.

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2024 MFTB Holdco, Inc., a Zillow affiliate.

SOURCE Zillow

For further information: Alex Lacter, Zillow, press@zillow.com