Jacksonville and Raleigh See Steepest Rent Declines as Sun Belt Cools

A dearth of multifamily development in some East Coast and Midwestern cities buoyed apartment rents in the third quarter, even as rent growth cooled across the Sun Belt and Southern metros. According to a new report from Redfin, rents rose by double digits in several cities in the Mid-Atlantic and Great Lakes regions, but declined in parts of the East Coast, California, and the Sun Belt.

Redfin found that asking rents dropped across all apartment sizes, from studios to units with more than three bedrooms — a trend the firm said hadn’t been seen in the last four years. Washington, D.C., and Virginia Beach saw the largest year-over-year rent increases, at 12.0% and 11.3%, respectively, while Jacksonville and Raleigh led the declines, with drops exceeding 10.6% over the same period.

“On the East Coast and in the Midwest, there hasn’t been as much building activity, so asking rents are rising. Meanwhile, if you’re in a Sun Belt city where construction boomed following the pandemic, rents are now falling pretty fast,” Redfin senior economist Sheharyar Bokhari said. “Rents remain stable nationally, but could look very different depending on where you live in the country.”

Year-over-year rent increases ranged from 6.4% to 11.1% in Cleveland, Baltimore, Chicago, Minneapolis, Providence, Cincinnati, Houston, and Louisville, according to the analysis. At the same time, cities with large rent decreases included San Diego (-10.4%), Austin (-9.9%), Tampa (-7.7%), San Francisco (-7.5%), Pittsburgh (-5.8%), and Phoenix (-5.6%).

Apartment rents remained mostly flat in New York, while rents dropped in Miami and Los Angeles by more than 3.6%.

Redfin noted that while regional markets show differing rent growth patterns, wages have increased by approximately 4%, offering some relief to renters. However, affordability remains uneven, particularly in cities experiencing steep rent declines or sharp increases, depending on local supply conditions.

These regional shifts come as key markets brace for a surge in apartment deliveries.

GlobeSt.com reported in August that more than half a million apartments are expected to be completed this year — a 9% increase over 2023 and a 30% jump from 2022. While New York and Dallas are expected to add approximately 33,000 new apartments this year, Austin’s apartment supply is slated to increase by more than 21,500 units. Phoenix and Atlanta are also expected to add 20,141 apartments and 18,520 apartments, respectively.