September 2025 saw the steepest drop in rent prices in more than 15 years, the Wall Street Journal reports (1).
The national average rent fell 0.3% between August and September, according to data from the CoStar Group, and landlords across the country are feeling the shifting effects of supply and demand (2). While a 0.3% dip may sound modest, it’s notable because September typically sees stronger rental demand. The move signals a broader cooling trend rather than a dramatic collapse in prices.
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Rather than cutting rents outright, landlords are increasingly leaning on concessions to keep monthly asking prices intact while still luring tenants: months of free rent, covered moving costs, gift cards and free parking.
The WSJ reports that the deepest rent reductions are to be found in cities like Austin, Denver and Phoenix (3).
So after years of rising rent costs, are the country’s renters now in a power position? The data shows that the renter-friendly market may be set to last, at least for a few years. Here’s how you can take advantage of the swing in your favor as a renter, and the legal rights you should be aware of in this changing market.
What’s driving lower rent prices?
A number of factors are contributing to the tepid rental market across the country right now. For one, young renters are pulling back: the unemployment rate for Americans aged 20 to 24 hit 9.2% in August (4, 5) — more than double the overall rate — just as college graduates typically flood the rental market. With job anxiety rising and entry-level hiring tightening, many young adults are choosing to stay put, seek roommates or move home rather than rent new places.
A report from Cengage Group showed that 76% of employers surveyed are hiring the same number or fewer entry-level employees as last year, and only 30% of 2025 college graduates were able to find work in their chosen field (6).
Supply is also up. In the Sunbelt in particular, a construction boom has led to an oversupply of rental housing (7), which the WSJ suggests may be growing as formerly remote workers are called back to the office in other parts of the country.
Finally, as President Trump’s anti-immigration policies bring fewer new workers to the country, demand from foreign residents is also slowing the market.
Who rents in the U.S.?
As these demand and supply pressures reshape the market, it helps to understand who is renting and who stands to benefit most from the power shift. The data shows that 37% of American households rent their homes, and renters tend to be younger than homeowners. Adults under 35 make up 65% of renters. By contrast, 79% of Americans aged 65 and older own their homes (8).
However, Empower reports that renting is becoming more popular for baby boomers, with a 30% rise in renters aged 65 and over in the past decade (9).
They also found that renting is more cost-effective than buying in a whopping 32 of the 50 largest metro areas in the U.S., especially in notoriously pricey spots on the west coast like San Jose, San Francisco and Los Angeles. Moreover, with mortgages rates standing at around 6.58% the elevated prices in cities make buying look less attractive than ever.
The National Association of Realtors found that affordability hit a record low nationwide in 2023, and the change has been swift: In 2021, 55% of households met the income requirements for getting a mortgage, meaning they could afford to purchase the median-priced home without spending more than 25% of their income on the mortgage payment. Now, only 33% of households meet this criteria (10).
So while renting is looking better than ever, landlords are hoping that this trend peters out quickly. The WSJ reported that analysts had predicted that surplus supply would balance out the demand by the end of this year, and landlords could regain their pricing power.
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How to find a great deal in the rental market
While investors may not realize the value of their real estate holdings over the next few years, renters can at least find some relief from inflated housing prices, even if it’s only temporary. If you’re in the market for a new rental, be sure to do the research for your area. Look into the following:
- Look at comparable listings in your neighborhood, check how long units are sitting vacant and pay attention to how many concessions landlords are offering — all signs of leverage for renters.
- Can you negotiate a better deal by asking for some of the common perks, like a month or more of free rent or a free parking spot? If you’re in a position to negotiate, it’s worth it to make an offer.
- Even current tenants may have room to negotiate if similar units in their building or neighborhood are being advertised with incentives, though landlords are more likely to offer concessions to new renters than to existing ones.
Before negotiating, check your state or city laws on notice periods, allowable rent increases and tenant protections. Local housing departments or tenant unions often publish easy-to-read guides.
What landlords are allowed to do
Rent control laws vary by jurisdiction, but in general a landlord can raise the end either at the end of your lease period, or by written notice (30- 60 days, in most jurisdictions) if you have a month-to-month agreement.
If you live in a rent-controlled or rent-stabilized area, your landlord will have a limit on how much they can raise your rent each year, but apart from this, a landlord can raise prices according to their own discretion as long as they follow the applicable laws. Some states have laws in place that govern increase in prices, so it’s important to understand the regulations in your area.
And while renters currently enjoy more leverage, it’s important to remember that landlords can still raise prices when market conditions shift, so understanding your local laws helps prevent surprises.
Renters may finally be in the driver’s seat, at least for now. With an oversupply of new apartments, cautious young renters and landlords leaning heavily on concessions, the balance of power has shifted. If you’re considering moving, renewing or negotiating, this is the moment to shop around, compare incentives and use the soft market to your advantage. The renter-friendly window won’t last forever, but while it’s here, informed tenants have more room than usual to secure better deals, better terms and more flexibility.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
The Wall Street Journal (1, 3, 5); CoStar Group (2); Trading Economics (4); Cengage (6); Business Insider (7); Prospect (8); Empower (9); National Association of Realtors (10)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.