A softer rental market offered tenants leverage but left affordability questions for housing pros
For the first time in years, the United States rental market in early 2026 looked tilted toward tenants rather than landlords, with rising vacancies pressuring asking rents across much of the country.
The January 2026 Realtor.com rental report showed median asking rent for 0–2 bedroom units in the 50 largest metros at $1,672. That's down 1.5% year over year and marking the 29th consecutive annual decline. That level is still about 15% above pre‑pandemic rents and only 4.8% below the 2022 peak, underscoring how far costs have climbed before the recent slide.
An average vacancy rate of 7.6% across those metros in 2025 put 22 markets in renter‑friendly territory and another 22 in balance, with just six still clearly favoring landlords.
Rents retreat, but leverage varied sharply by market
Nationally, all unit types recorded year‑over‑year rent declines in January. Studios rented for a median $1,393, one‑bedrooms for $1,552 and two‑bedrooms for $1,847, with two‑bedroom rents posting the steepest annual drop at 1.7%. Yet those benchmarks remained 10% to 17% higher than six years earlier, even after nearly two and a half years of easing.
“After years of being squeezed by limited inventory, renters are finally seeing the supply wave work in their favor,” said Danielle Hale, chief economist at Realtor.com.
“This shift doesn't just mean lower prices; it means that renters today have more options and more bargaining power.”
Conditions diverged sharply across metros. Birmingham, Austin, Houston and Tampa sat among 16 Sun Belt markets classified as renter‑friendly, with double‑digit vacancy in several cases and rent cuts in Austin of more than 7% year over year.
By contrast, Boston, San Jose, Providence, Los Angeles and New York remained landlord‑friendly, all with vacancy below 5%. In San Jose and New York, rents even rose modestly in the past year despite the national downtrend.
Milwaukee’s “great flip” and setbacks in job‑rich metros
Vacancy rate in Milwaukee more than doubled from 4.9% in 2024 to 10.8% in 2025 as a surge of multifamily construction hit the market, moving conditions from landlord‑friendly to renter‑friendly in a single year.
“We are seeing a fascinating tug‑of‑war,” said Realtor.com economist Jiayi Xu.
“In the Sun Belt and parts of the Midwest, new construction is helping to create negotiating room for renters. But in traditionally more affordable areas like Richmond and Pittsburgh, the secret is out.”
Those markets, relatively affordable and job‑rich, shifted from renter‑friendly to balanced as vacancy moved back into the 5% to 7% range and rents ticked higher.
What a renter‑friendly market meant for mortgage and CRE players
For lenders and commercial brokers, the report reinforces trends through 2025: heavy multifamily pipelines in select metros, rent growth that cooled from its pandemic highs, and operators relying more on concessions to keep occupancy up.
The broader government data still pointed to a relatively loose rental market by historical standards, with the Census Bureau placing the national rental vacancy rate around the low‑7% range at the end of 2025, near its long‑term average.
For housing professionals, vacancies and modest rent declines finally handed renters some negotiating power, but the gap between today’s asking rents and pre‑COVID levels remains wide.
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