Rents Are Dropping Fast in These 28 Cities

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Recession Rumors Overblown? Slower Growth Ahead, But No Crash Yet link

• Despite rising oil prices, new tariffs, student loan payments restarting, and higher long-term interest rates, Apollo’s chief economist says these pressures aren’t enough to trigger a recession. They're seen as “milder” than past shocks like Covid-19 or the Lehman collapse.

• The U.S. economy is slowing—but not stalling. Current GDP risks are being monitored, especially if oil, tariffs, or long rates climb more sharply this year.

• Fiscal pressures are dragging growth, but the fundamentals still show resilience. No major downturn is projected unless external shocks worsen significantly.

Industrial rents dip as tenants gain leverage—vacancy hits 10-year high link

• Over half (52%) of global industrial markets are now tenant-friendly, with U.S. vacancy rates climbing to 7.8%—the highest level in more than a decade. Landlords only hold the advantage in 24% of markets.

• Logistics rents globally fell 5% in 2024—the first drop in over a decade—with the U.S. and Canada seeing a sharper 7% decline. Miami was a rare outlier, posting rent growth over 11%.

• Industrial construction is collapsing: new deliveries in the U.S. dropped below 331M square feet in 2024, and completions are expected to hit a 10-year low by end of 2025. This supply crunch could swing power back to landlords by 2028.

Multifamily Construction Booms in Small Towns—Cities Left Behind link

• Multifamily construction spiked 29.3% in micro counties and 33.2% in large metro outlying areas in Q1 2025, while large metro core counties saw their market share drop by 4.8 percentage points. This marks a shift away from urban centers toward lower-density areas.

• Single-family construction slowed nearly everywhere, with large metro counties dropping from 9.4% growth to just 1.3%. Only small metro core counties saw notable growth at 3.2%.

• The combined market share of low-density areas for multifamily construction grew from 7.8% to 10% in one year—a 2.2 percentage point jump. This aligns with suburban rental demand outpacing urban core growth in multiple major metros.

Investors pile into cheap states like Kansas—but All-Cash Sales Fall to the Lowest Level Since 2008 link

• All-cash investor purchases dropped to their lowest level since 2008, even though investors still buy in cash far more than typical buyers—62.3% of investor deals were cash, compared to 33.4% of all purchases. This shift shows even investors are leaning more on financing.

• Kansas rents rose 4.9% year over year while national rents fell 1.7%, making it one of the rare markets with rising yields. Kansas City renters now spend 20.7% of income on rent—still under affordability thresholds but rising fast.

• Missouri had the highest investor buyer share in 2024 at 21.2%, followed by Oklahoma and Kansas. In affordable Midwest and Southern cities like St. Louis and Memphis, investors are snapping up properties for under $200K.

• click on the link to see the rest of the list.

Rents Are Dropping Fast in These 28 Cities—Is the Market Turning? link

• 28 out of 44 major U.S. metros saw rent declines in May 2025, the most widespread drop since late 2023. The national median asking rent dipped 1% year-over-year to $1,633.

• Austin rents plunged nearly 9%, reaching their lowest level since early 2021, as a flood of new apartments outpaces demand. The city issued more multifamily permits per capita than any other metro.

• Less than half of new apartments are being rented within 3 months, a record-low lease-up rate. Vacancy rates in buildings with 5+ units hit 8.2%, giving renters the upper hand in negotiations.

Seattle’s affordability crisis deepens—tax hike adds fuel to the fire link

• Seattle’s price-to-income ratio ranks among the worst in the U.S., making it one of the least affordable metro housing markets. Even as inventory rises and prices stabilize, affordability remains a major barrier.

• A new property tax hike just passed by state lawmakers is expected to make housing costs even harder to manage for homeowners and buyers alike. This could further suppress demand and delay recovery in home sales.

• Despite a year-over-year increase in single-family home inventory, home sales are still sluggish. Listings are up, but the market isn’t moving much—signaling affordability, not supply, is the key choke point.

Zillow plugs AI into rentals—here’s what changes for landlords and renters link

• EliseAI’s LeasingAI tool will be embedded into Zillow Rentals by Q3 2025, offering instant 24/7 support for multifamily listings in over 50 languages. This streamlines tenant inquiries and boosts efficiency for property managers.

• The new tool, branded “AI Assist,” will automate common renter questions and improve lead response time, potentially reducing vacancy periods.

• Property managers using Zillow may gain a competitive edge by offering faster, more accessible communication—especially in high-demand rental markets.

Housing insiders brace for major shakeup—which asset comes out on top?

Zillow’s May 2025 Market Report Summarized

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Diamond in the rough!

Link to the listing

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Vidit

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