One Month Free Is Becoming The New Normal. What Does That Say About Today's Renter?

The U.S. rental market closed out 2025 in a more competitive leasing environment, with softening rents, elevated vacancy and longer lease cycles. 

One of the clearest signs of that shift is the rapid rise in concessions. Drawing on leasing activity across its platform, Apartment List’s research and economics team found that roughly 35% of properties closed out 2025 offering incentives valued at one month of free rent or more, up from 25% at the start of last year.

Rates vary widely by market, with Phoenix and Austin seeing 50% of rental properties or more offering at least a month free, while Northeastern markets are significantly less likely to offer deals, Chief Economist Chris Salviati said. 

Apartment List also found that the national median rent fell by 1.3% in 2025, the third straight year of declines. Salviati said the primary driver behind these market conditions is the wave of new supply that has come online in recent years.

“There's been a real boom in multifamily construction,” he said. “In 2024, we saw the most new units hit the market since the mid-1980s.” 

Salviati said that while construction slowed last year and is expected to slow further in 2026, elevated supply will continue to drive competition across many markets. 

The national multifamily vacancy rate reached 7.3% in January, the highest reading in the Apartment List index’s history, going back to the start of 2017. Apartment List also found that median list-to-lease time now sits at 41 days, the longest reading on record, which signals “renters are taking more time, exploring more options and moving with less urgency,” Salviati said.  

Of course, not all rental markets are the same, and conditions vary widely depending on the region. The Sun Belt markets were at the epicenter of the construction boom and have seen softening rents as a result. Austin, where more multifamily units were built than in any other major market in the country, experienced a 6.5% decline in the metrowide median rent in 2025, while Phoenix, Las Vegas, Dallas, San Antonio and Tampa, Florida, are also seeing notable pricing dips.  

On the West Coast, rents have been more resilient, and in the Midwest, where rents are typically lower, the rates rose as more people migrated to places like Chicago and St. Louis in search of affordability. 

“Both of those markets are up 4% over the past year in terms of the median rent,” Salviati said. “Meanwhile, several of the Northeast markets are up, including New York, which saw a 3% increase in rents. It really comes down to places that are building versus places that are not.” 

Concessions have become a defining feature of today’s leasing environment, and those same supply imbalances are now driving how heavily operators are relying on them across markets.

“Even properties that were already stabilized are now seeing their occupancy soften because of all this competition from new supply,” Salviati said. “Throughout these markets, we are seeing there is more of a need to be leaning on concessions as a tool to get folks in the door.” 

As 2026 unfolds, he said landlords and operators should keep a close eye on the labor market, job growth and consumer sentiment as signs of what is to come. Apartment List data has shown that when workers feel less confident, household formation slows, which softens apartment demand. 

He also recommended keeping track of what is happening on the for-sale side of the market as an indication of where the rental market is heading. 

“For a long time now, this has been a very challenging market for first-time buyers to break into, which has been keeping a lot of households in rentals for longer and boosting demand,” Salviati said. “It doesn't look like we're going to see any huge shifts this year, but it’s still another important factor to watch.” 

This article was produced in collaboration between Studio B and Apartment List. Bisnow news staff was not involved in the production of this content.

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