Median apartment rents declined again on an annual basis in September but clocked the smallest drop in three years, according to Realtor.com.

Across the 50 largest metro areas, median asking rents ticked down by 0.4% year-over-year to $1,694. That brings asking rents to 4.5% below their peak in August 2022 but keeps them 14.5% higher than before the pandemic.

“While asking rents are below their 2022 peak and concessions are still easy to find, for many households, relief is not the same as affordability,” Realtor.com senior economist Jiayi Xu said in a statement.  

Following the pandemic-era surge in rental rates and aided by the spread of remote work, many people decamped to more affordable places in the Midwest and Sun Belt. That influx of residents in turn made rent costlier in those same places. St. Louis, Minneapolis and Las Vegas all posted rent increases in September. St. Louis posted the biggest swing, from an annual decrease of 2% to an increase of 4.4%.

San Francisco Bay Area apartments showed the biggest increase as the artificial intelligence boom continues to drive recovery in the area and brings workers back to the market. Median asking rent in San Jose rose 6% year-over-year to a record-high $3,565, while San Francisco rents increased by 4.8% to $3,057.

The country's persistent housing shortage has buoyed rents for years, keeping even the declines of the last few years somewhat muted. High mortgage rates are also doing their part to push up demand for apartments. 

“Elevated mortgage rates have pushed home shoppers straight into the arms of rentals,” Zillow senior economist Kara Ng said in a statement.

This is giving rise to what Ng called “the deliberate renter,” someone who chooses to rent and save the difference between rent and a mortgage as a way to build wealth. 

A Zillow index created to indicate rental demand rose 19.2% year-over-year, which the company attributed to would-be homebuyers staying in the rental market.

Mortgage rates were above 7% as of Thursday and are unlikely to come down anytime soon. The Federal Open Market Committee is expected to either hold rates where they are or raise them by 25 basis points, according to CME's FedWatch.

Still, while home prices across the country have begun to tick down, they haven’t dramatically fallen. Although interest rates are keeping buyers at bay, sellers aren’t desperate to offload their homes and aren’t cutting prices to the level needed to bring homeownership within reach for more Americans, The Wall Street Journal reported. 

Renters still want single-family homes, but they want to rent them, Zillow said. It found demand for single-family home rentals rose 21.6% from a year ago, more than double the 10.1% rise in demand for multifamily rentals. 

The deliberate renter group includes an increasing number of millionaires. The number of millionaire renter households in the U.S. more than tripled in just five years, growing 229% between 2020 and 2024, according to RentCafe. 

Millionaire homeowner households grew 193% during the same period. The greater growth in millionaire renters than homeowners marks a shift in housing preferences, as the wealthy have traditionally favored homeownership, RentCafe said.