37.3% of active listings on Zillow offered an incentive
Rental Concessions Hit Record Levels as Landlords Compete for Tenants
More than a third of rental listings on Zillow now include some form of concession in September, the highest share on record. According to marketplace’s latest report, 37.3% of active listings offered an incentive such as a free month’s rent or complimentary parking, up from 36.7% in August and well above the 14.4% recorded in 2019.
Landlords increasingly prefer to offer these short-term perks rather than lower monthly rents. Zillow noted that concessions typically follow seasonal patterns, peaking in winter or early spring and predicted that giveaways are likely to keep climbing in the coming months. However, as such incentives become normalized, property managers may soon need to consider actual price reductions to remain competitive.
Despite the overall rise in concessions, 12 major cities saw declines, including Birmingham, Los Angeles, Minneapolis, Cleveland, and San Francisco. Meanwhile, 37 metro areas recorded higher concession rates, led by Pittsburgh, Seattle, Richmond, Raleigh and Hartford. The largest year-over-year jumps occurred in Memphis, Denver, Houston, Orlando, and Las Vegas.
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Nationwide, rental affordability is better than it has been in four years, driven by subdued rent growth and widespread incentives amid record levels of new apartment construction. Zillow reported that annual rent growth slowed to 1.7%, the second-lowest rate since 2021. A softening labor market is also contributing to the cooling trend.
Apartment rent declines are concentrated in the South, Sunbelt and Mountain West regions, with the steepest year-over-year drops in Austin, Denver, San Antonio, Phoenix and Orlando. In contrast, rent growth remains stronger in markets with stricter building codes and persistent demand, such as Chicago, San Francisco, New York, Providence and Cleveland.
The typical asking rent for multifamily homes stood at $1,809 in September, down 0.2% from the previous month. Since the start of the pandemic, multifamily rents have risen 28.2%.
Single-family rentals are showing similar signs of slowing, climbing just 3.2% year-over-year in September — the smallest annual increase since 2016.
Source: GlobeSt.
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