March 2025 Rental Trends: A Closer Look at Year-Over-Year Declines

As we step into March 2025, the U.S. rental market reveals significant trends that affect renters across the country. This month marks the 20th consecutive month of decline in asking rents for properties with 0-2 bedrooms. Let’s dive into the details.

Key Highlights of March 2025 Rentals

• Asking Rent Decrease: Asking rents for 0-2 bedroom units saw a decline of $20, or -1.2% year-over-year.
• National Median Rent: The median asking rent in the 50 largest metropolitan areas reached $1,694, showing a slight increase of $4 from the previous month but still $65 below the peak observed in August 2022.
• Unit-Specific Trends: Rent for larger unit categories also experienced declines:
  • Studio: $1,407, down $17 (-1.2%)
  • 1-Bedroom: $1,577, down $17 (-1.1%)
  • 2-Bedroom: $1,878, down $26 (-1.4%)

Commemorating Five Years Since COVID-19

As we reflect on five years since the start of the COVID-19 pandemic, it’s noteworthy that San Francisco, CA, remains the only major market where median asking rent is still below pre-pandemic levels. This ongoing trend highlights the city’s unique challenges in its rental landscape.

How Tariffs Could Impact Multifamily Construction

The recent 25% tariffs on imported steel and aluminum are expected to affect various emerging markets, including:

• Milwaukee, WI
• Oklahoma City, OK
• Memphis, TN

These cities, having seen the fastest growth in multifamily homes, could face increased construction costs, thereby impacting housing supply. As prices rise, this could ultimately transfer costs to renters.

Detailed Rental Trends: March 2025

The U.S. rental market is experiencing substantial year-over-year declines, with the median rent now $65 lower than its 2022 peak. Here are the key metrics:

• Overall Median Rent: $1,694, with a 20.2% increase compared to March 2019.
• Regional Highlights:
  • Pittsburgh, PA leads the Northeast with a remarkable 47.9% rental growth.
  • Tampa, FL follows in the South with a 45.7% increase.
  • Indianapolis, IN (Midwest) sees a 34% growth, while Sacramento, CA, in the West, experiences a 30.6% rise.

Rents by Unit Size: Notable Declines

The declining trend is consistent across larger units:

• Two-Bedroom Units: The median rent dropped 1.4% year-over-year, now at $1,878.
• One-Bedroom Units: Experience a 1.1% decrease, presently at $1,577.
• Studios: Rentals fell by 1.2%, with median rents hitting $1,407.

The Impact of Tariffs on the Rental Market

The 25% tariffs introduced pose a significant challenge by increasing material costs for multifamily units. This could potentially halt new developments in fast-growing markets like Milwaukee and Oklahoma City, where permits surged as much as 101.3% over five years.

Affected Markets

The following markets are poised to feel the impact most:

• Milwaukee-Waukesha, WI: 1,884 permitted units (+101.3%)
• Oklahoma City, OK: 581 permitted units (+90.4%)
• Memphis, TN-MS-AR: 1,089 permitted units (+39.5%)

However, markets experiencing declining permits will not remain unaffected. Rising construction costs may restrict new development plans, ultimately exerting additional upward pressure on rental prices.

Conclusion

As we assess the U.S. rental landscape in March 2025, we observe significant trends in rental prices and regional market movements. While some areas may struggle with increasing costs due to tariffs, others continue to show resilient growth. Stay informed about these dynamics as they could affect your housing decisions in the near future.

For more insights into rental trends and market analysis, visit Realtor.com and stay updated on the latest in real estate.

This article aims to provide a comprehensive overview while ensuring that the information is engaging and easily digestible for all readers. Stay tuned for more updates in the evolving rental market landscape.