U.S. Asking Rents Fell Slightly in March
Tariffs Could Drive Up Costs for Renters
by Lily Katz, Redfin
According to a new report from Redfin, the median U.S. asking price for rents fell 0.6% year over year to $1,610 in March, and rose 0.4% month over month.
Asking rents have stabilized below their 2022 record high of $1,705. March marked the 13th-straight month in which asking rents barely decreased or increased, with a year-over-year change of less than 1% during each of those months.
Redfin economists have been saying for months that it’s only a matter of time before rents tick up again. That is because apartment construction is slowing, which will likely motivate landlords to raise rents because there won’t be as much supply, meaning they won’t be competing as fiercely for tenants. Now there is a new twist that could expedite this process: tariffs.
Tariffs and Rents
“America gets a lot of building materials from other countries, so tariffs will make building apartments more expensive. That could further hamper apartment supply, causing rents to jump,” said Redfin Economics Research Lead Chen Zhao.
“Tariffs could also drive up rents by increasing demand. People may opt to rent instead of buy homes because the turmoil around tariffs has fueled widespread economic uncertainty. Tariffs have already caused huge swings in the stock market, and they will lead to higher prices for many goods and services, along with increased unemployment.”
Tariffs could have a big impact on the rental market partly because nearly one-quarter of America’s softwood lumber — a key material in building apartments — comes from Canada, according to the National Association of Home Builders.
During the pandemic moving frenzy, rents skyrocketed because there were not enough apartments to meet surging demand. Builders then ramped up construction, which caused rents to fall in 2023 and early 2024 because landlords were competing for tenants. There are still a lot of newly built apartments coming on the market, which is keeping rent growth at bay. But renter demand is strong due to high homebuying costs, which means rent declines are also limited—for now.
Asking rents are nearly $400 below their record high in Austin
In Austin, TX, the median asking rent dropped 10.7% year over year to $1,420 in March — $379 below its record high. That was the largest decline in percentage terms among the 44 major U.S. metropolitan areas Redfin analyzed. Next came San Diego (-9.7%), Portland, OR (-7.8%), Minneapolis (-7.8%) and Raleigh, NC (-6.8%).
Texas was one of the top homebuilders during the pandemic building boom, which is one reason Austin is seeing such a large decline in rents. The recent declines mean Austin is no longer the state’s most expensive big city for renters.
