Rent Growth Slows in June

Rent growth was historically slow in June, bringing the projected rent growth for all of 2025 to just 2.7% for single-family homes and 1.3% for the multifamily sector, according to Zillow’s Observed Rent Forecast. In June, the single-family rental market—which has been the primary driver of rent growth in the rental market over the past few years—saw rent growth slow considerably. Rents for single-family homes increased by just 0.3% from May to June and grew by 3.6% from June 2024. Zillow suggests this slowdown could be the product of increased housing inventory nationwide, allowing more renters to enter into homeownership.

As inventory builds back up in the for-sale market, buyers are gaining negotiating power, which means aspiring homebuyers who have been sidelined in recent years now have more options to consider. The recent boom in multifamily construction, too, has given renters more options. Together, these factors are lifting some pressure off of the national rental market, as well as in many local markets. Rents have increased less than 1% since last year in ten major markets, mostly located in the Sun Belt, where multifamily construction has been strong.

A symptom of a cooling rental market, rental concessions held steady at 35% in June, marking the highest share of concessions of any June on record. Concessions, which can include offers of free parking or weeks of free rent, can help to bring rental affordability within reach for some renters. Though rent growth has cooled significantly, renters are still feeling the squeeze. With rents having increased 35.3% over the last five years, the median household would now need to spend 30.1% of their income to afford the typical rent – roughly at the commonly accepted threshold for rent burden.