Traditionally, the rental and housing markets fulfill the general population’s evolving housing needs. In today’s housing market, the many challenges prospective homeowners face—the most pressing of which is a combination of lagging income growth and the increased cost of homeownership due to high interest rates—push them to continue signing leases until homebuying conditions or financial circumstances improve.
We compiled data from Zillow, the U.S. Census Bureau, the National Association of Realtors (NAR), Freddie Mac, and Experian to uncover trends in the national rental market. Our analysis revealed insights into key rental statistics, from the cost of rent across geographical locations and housing types to the best time to rent for an affordable price.
If you’re looking to save money on your next move, contracting with a cheap moving company can give you extra funds to splurge on home furnishings—even if you’re renting for now.
Key Takeaways
- The median rent in the U.S. was $2,015 in December 2024, up $15 from December 2023.
- Although it’s good practice to spend no more than 30% of your gross monthly income on rent, almost 52% of renters paid more in 2023.
- In the third quarter of 2024, 30.9% of residents rented a home, and 58.9% owned their homes.
- More than 500,000 rental units were built in 2024, and the share of built-for-rent single-family homes doubled between 2021 and 2023.
- Winter is the most affordable time to rent an apartment, while summer is the most expensive.
U.S. Rental Market
The median rent in December 2024 was $2,015, up $15 from December 2023, according to Zillow. It’s not recommended to spend more than 30% of your monthly gross income on rent, yet almost 52% of Americans are already on that financial slippery slope, according to the Census Bureau. In fact, 42.5% of U.S. renters spend 35% or more of their gross income on rent.
In the third quarter of 2024, 58.9% of U.S. residents owned a home, while 30.9% rented, per the Census Bureau. Five cities in California and four cities in Colorado appear on Zillow’s list of the 15 cities with the highest typical rents. New York City is No. 12 on the list of the most expensive cities to rent.
| City | Monthly Rent |
|---|---|
| Glenwood Springs, CO | $5,936.64 |
| Edwards, CO | $4,237.30 |
| Steamboat Springs, CO | $3,978.39 |
| Jackson, WY | $3,950 |
| Key West, FL | $3,842.56 |
| Kahului, HI | $3,680.23 |
| Santa Maria, CA | $3,668.89 |
| Breckenridge, CO | $3,506.98 |
| Santa Cruz, CA | $3,406.53 |
| Naples, FL | $3,318.35 |
| San Jose, CA | $3,296.47 |
| New York, NY | $3,224.97 |
| Heber, UT | $3,088.73 |
| Oxnard, CA | $3,045.44 |
| Napa, CA | $3,019.20 |
The share of built-for-rent single-family homes doubled between 2021 and 2023, per NAR. As 2024 comes to a close, developers will have completed an estimated 518,108 new rental units, a 9% increase from 2023 and a 30% increase from 2022, per RentCafe. Here are the top 10 booming metros for new rental units:
- New York: 32,395 new rental units
- Dallas: 32,932 new rental units
- Austin, Texas: 21,506 new rental units
- Phoenix: 20,141 new rental units
- Atlanta: 18,520 new rental units
- Houston: 18,301 new rental units
- Washington, D.C: 15,079 new rental units
- Charlotte, NC: 14,658 new rental units
- Miami: 14,177 new rental units
- Denver: 12,913 new rental units
Looking forward, developers are expected to add 2 million more apartments by 2028, with the New York, Dallas, and Austin metro areas continuing to lead in growth, according to RentCafe. However, new rental unit deliveries are estimated to decline by 15% in 2025, with only 440,478 new rentals projected to arrive on the market. The number of rentals added is projected to decrease to a decade-low of 319,000 rentals in 2027, with only a slight uptick the following year.
How Much Does It Cost to Rent?
The cost of renting depends on several factors, including what type of housing you want—a house, apartment, condo, or townhome—and how many bedrooms you need. Your geographical location and the local economy often set the bar for rental rates. Rent can also fluctuate based on the time of year you sign your rental agreement.
Median Rent by Type
Generally speaking, studio apartments and condos are—and typically have been—the most affordable to rent, according to Zillow. However, the small difference in median rent between studios and one-bedroom rentals ($1,500 versus $1,553 in December 2024) can drive individuals and couples to opt for larger spaces to get more bang for their buck. A renter who opts for a more affordable apartment or condo instead of a house—a $744 difference in median rent—may trade an expanded layout, a large yard for dogs, or a ground-level dwelling for less square footage, a balcony or porch, and stairs.
| By Home Type | Median Rent |
|---|---|
| House | $2,225 |
| Apartments/Condos | $1,481 |
| Townhomes | $2,200 |
| By Bedrooms | |
|---|---|
| Studio | $1,500 |
| 1 bedroom | $1,553 |
| 2 bedrooms | $1,850 |
| 3 bedrooms | $2,150 |
| 4+ bedrooms | $7,561 |
Rental homes with four or more bedrooms often cater to college students who can potentially spend less on rent by living with one or more roommates. However, with a median rent of more than $7,500 for this type of living situation, that still leaves a nearly $1,900 rent payment for each of the four students. Although splitting amenity and utility costs can help offset high rent, some renters may prefer the privacy of a studio or one-bedroom unit—at nearly $400 per month less.
When Is the Best Time To Rent?
Rentals tend to be more affordable during the winter months and more expensive in the summer, according to Experian. Decreased demand from November through March can increase affordability, but prospective renters tend to have more rentals to choose from between May and September. In some cases, rental prices can fluctuate by about 5% between these two rental market seasons, depending on the following factors:
- Convenience
- High rental unit demand
- Mover availability
- Prevailing weather patterns
If you plan to move out of your existing apartment, begin your search one or two months before your lease expires. If you live in a particularly competitive market—such as a trendy area or college town—start looking sooner. Once you’ve lined up a new place to live, you can focus more on making the move as smooth as possible.
How To Determine How Much Rent You Can Afford
Traditional wisdom dictates that renters should spend no more than 30% of their gross income on rent. We used 2023’s median household income of $80,610—per the Census—to calculate how much people at this income level should spend on rent each month. Keep in mind that December 2024’s median rent was $2,015, per Zillow.
The following table illustrates the maximum rent recommended based on income, divided into increments of $20,000:
| Annual Income | Monthly Rent |
|---|---|
| $20,000 | $500 |
| $40,000 | $1,000 |
| $60,000 | $1,500 |
| $80,000 | $2,000 |
| $100,000 | $2,500 |
| $120,000 | $3,000 |
| $140,000 | $3,500 |
| $160,000 | $4,000 |
Renters who earn the 2023 median household income of $80,610 are advised to spend a maximum of $2,015 in rent per month—exactly the amount of December 2024’s median rent. The median household income increased by 4% in 2023, the first significant income increase since 2019. Even so, many Americans struggle to afford rent.
The 50/30/20 rule, another common financial guideline, allows for fluctuations based on lifestyle choices, according to Experian. Under this formula, you can spend 50% of your income on essentials (including rent), 30% on wants, and 20% on savings and paying down debt. If you made $60,000 annually and paid median rent, you’d have $485 per month to spend on remaining essentials, including utilities, car payments, and other obligations.
Splitting housing costs with one or more roommates can help you reduce your monthly rent burden. As you look at rental properties, compare rates and amenities to find the best deal, and take advantage of any move-in specials. Signing a longer lease may help you get a better rate since it can give property owners and landlords steady income for a longer period.
Hidden Fees and Other Costs of Renting
Rental properties often come with several one-time, recurring, and hidden fees beyond the advertised monthly base rate. Accounting for all of these costs when planning a move can help you save enough for a smooth transition and get a more informed picture of your financial obligations every month. Non-recurring rental fees often include the following:
- Application fee: This administrative cost typically ranges from $25–$100. In some states, it’s illegal for landlords to charge an application fee.
- Pet fee or deposit: A pet deposit or fee can range from $50–$500 and reimburses the landlord for any damage a pet may cause, from frayed carpeting to chewed-on doors.
- Security deposit: Landlords can charge the first and last months’ rent, one month’s rent, or a flat rate less than one month’s rent as a security deposit.
Don’t overlook the cost of moving as part of your rental budget. According to 2024 Angi data, moving costs can range from $800–$10,000 or more, depending on factors including whether you rent a truck or hire movers and the distance between your old and new homes. You may also have these recurring rental fees:
- Parking fees: While many landlords allot one or two spaces per unit, they may also offer covered parking—carports and garages—for an additional cost.
- Pet rent: Property owners typically require either monthly pet rent or a one-time pet fee or deposit.
- Renter’s insurance: Renter’s insurance is generally optional, but some landlords or rental companies require it as a condition of your lease.
- Utilities: If your landlord doesn’t include heat, water, sewer, and trash in your monthly rent, you’ll be responsible for paying these utility bills directly, along with electricity, Wi-Fi, and cable.
The hidden costs of renting can include one-time or recurring maintenance fees, a home-furnishing budget, move-out cleaning charges, and other ad hoc expenses. Rental property owners typically disclose all related fees within the lease, but understanding which ones apply to you requires thorough reading. Before signing the lease, ask about any fees you may be responsible for.
FAQ About Rentals
How does rent-to-own work?
With a rent-to-own property, the lease includes stipulations that enable the renter to allocate a portion of their monthly payments toward the purchase of the home, typically within a three-year span, according to Zillow. Although these types of properties aren’t as common, they can offer renters a route to homeownership in a dwelling they’re already settled into.
Can you negotiate rent?
Yes, you can negotiate rent. However, your success depends on whether the landlord or property management company is willing to negotiate and the level of rental demand in the surrounding area, among other factors.
Is it cheaper to own or rent a house?
In the current market conditions, it’s generally cheaper to rent than to buy a home, according to Realtor.com. High interest rates, the current economic landscape, and the cost of a starter home factor into this, but homeownership also brings several tax advantages. Consider your current financial circumstances and long-term goals before deciding between renting and owning a home.
Is rent tax deductible?
No, rent typically isn’t tax deductible. The only time you can deduct a portion of your rent from your taxes is when you claim it as a business expense. Even then, you can only claim the portion explicitly used for business, according to the IRS.