Shelter Inflation May Be Easing: Here’s What Renters Should Know
Renters across the U.S. could finally see some relief as rent growth begins to cool. According to Realtor.com’s latest May Rent Report, median asking rents are still higher than they were before COVID-19, but the pace of increase is now trailing behind both consumer inflation and skyrocketing home prices.
As of May 2025, the typical rent for a studio to two-bedroom unit stands at $1,705, which is nearly 20% higher than in 2019. But that increase lags the 25.6% growth in the Consumer Price Index (CPI), hinting that housing costs particularly for renters may be easing relative to the broader cost of living.
Cities Where Rent Is Outrunning Inflation
Only nine major metro areas have seen rent hikes outpace general inflation since 2019. These include:
- Pittsburgh, PA – $1,466 (+43.2%)
- Tampa, FL – $1,736 (+41.6%)
- Miami, FL – $2,350 (+36.2%)
- Indianapolis, IN – $1,295 (+32.1%)
- Kansas City, MO – $1,394 (+31.3%)
- Sacramento, CA – $1,878 (+29.2%)
- New York City, NY – $2,902 (+28.7%)
- Jacksonville, FL – $1,512 (+27.2%)
- St. Louis, MO – $1,338 (+26.8%)
These cities have seen rent prices grow faster than the cost of everyday goods and services, putting additional strain on renters’ budgets.
Where Rents Are Cooling
On the flip side, rents have either dropped or grown more slowly than inflation in most metros. San Francisco leads the way with a 3.2% decline in median rent since 2019. Other cities seeing rent gains well below inflation include:
- Minneapolis, MN
- Oklahoma City, OK (+7.7%)
- Seattle, WA (+7.9%)
- Denver, CO (+8.9%)
- San Jose, CA (+8.9%)
Danielle Hale, Chief Economist at Realtor.com, emphasized that the current dip in rents is a positive sign for the broader economy. “Slowing rent growth should begin to show up in inflation data, which may help ease cost-of-living pressures in the months ahead,” she explained.
New Rental Trends Driven by Policy and Global Shifts
Recent policy decisions and global developments are reshaping local rental markets especially in cities heavily reliant on international students or government jobs.
Visa Restrictions Impacting Student-Rich Markets
Cities like Miami, Seattle, Boston, Orlando, and San Jose are experiencing rent declines as a result of new visa restrictions and enrollment freezes at major universities. These metros, once hotspots for foreign students, are now seeing softer rental demand:
- Miami: -2.7%
- Seattle: -2.3%
- Orlando: -1.1%
- Boston: -0.4%
Workforce and Federal Policy Shifts Affecting Rents
Federal employment centers are seeing mixed trends. While Washington, D.C. (+1.3%) and Baltimore (+0.3%) experienced slight rent increases, areas like San Diego (-5.9%), Virginia Beach (-2.5%), and Oklahoma City (-1.0%) saw rent declines. The interplay between return-to-office policies and government hiring slowdowns is reshaping demand.
Tariff-Driven Construction Costs May Drive Future Rent Hikes
Rising tariffs on steel and aluminum now up to 50% could slow new apartment construction and drive up rents in the near future. Cities like Columbus, OH, Milwaukee, Cleveland, and Memphis are particularly vulnerable due to recent surges in multifamily housing permits.
Rent changes in these areas (as of May 2025) include:
- Columbus, OH: +0.2%
- Milwaukee, WI: -0.5%
- Cleveland, OH: -1.9%
- Memphis, TN: -3.3%
Though rent hikes haven’t yet materialized, increased construction costs could begin showing up in the rental market soon, given the nearly 20-month average timeline for multifamily project completion.
By Unit Size: Rent Trends Nationwide
| Unit Size | Median Rent | YoY Change | Total Drop From Peak | 6-Year Change |
|---|---|---|---|---|
| Studio | $1,418 | -1.9% | -4.8% | +15.7% |
| 1-Bedroom | $1,582 | -2.3% | -4.6% | +18.0% |
| 2-Bedroom | $1,896 | -1.7% | -3.3% | +21.3% |
While rents have declined for nearly two years straight, the national median is still only $54 below its all-time peak from August 2022.
What Comes Next?
Experts expect shelter inflation to continue easing through the second half of 2025. The slowdown in rent growth, combined with shifting policies and higher construction costs, is creating a more complex housing landscape. As always, affordability remains a challenge but renters may finally be catching a break. For more information about financing visit Nadlan Capital Group.
Responses