By Karim Hammam
The U.S. housing market has stalled, pushing rental demand nearly 20 percent higher nationwide and driving the typical rent to a three-year high of $1,932 in September, according to a Zillow report released in October.
Rental demand surges nationwide
Elevated mortgage rates have slowed home-buying demand, turning prospective buyers into renters and shrinking supply. The average homebuyer's monthly payment has reached $3,037, making renting a cheaper alternative until rates become more affordable, Zillow said.
Major cities see sharp increases
Year-on-year rental demand jumped 82.5 percent in San Jose, California, followed by San Francisco at 66.9 percent, Austin, Texas at 49.3 percent, Miami, Florida at 48.9 percent, and Phoenix, Arizona at 43 percent. San Francisco recorded the largest rent increase at 11.8 percent, meaning a $4,000 apartment in September 2025 would average $4,472 a year later.
Economists warn of continued pressure
Economist Jonathan Millar told The New York Times that landlords hold the upper hand because demand remains healthy and supply is limited. High mortgage rates also make it harder for construction companies to borrow money to build new apartment complexes, reducing the likelihood of relief for renters soon.
Some cities see demand decline
Not all markets are tightening. Year-on-year rental demand fell the most in Louisville, Kentucky (-6.2 percent), Baltimore, Maryland (-6.1 percent), Washington, D.C. (-5.6 percent), Cleveland, Ohio (-5.5 percent), and Hartford, Connecticut (-2.9 percent).
