The US housing market has stalled - and that’s very bad news for renters

Many renters are facing a stressful time thanks to a slowdown in the U.S. housing market.

The typical national rent hit a three-year high of $1,932 in September and rental demand was up nearly 20 percent, according to an October report from housing marketplace Zillow.

Experts say it’s due to rising mortgage rates that have slowed home-buying demand, turning buyers into renters and shrinking supply.

"Elevated mortgage rates have pushed home shoppers straight into the arms of rentals," Zillow Senior Economist Kara Ng said.

The average homebuyer’s monthly payment has hit $3,037 so renting is a cheaper alternative until rates become more affordable, Zillow said. But renters are still likely to see their monthly payments rise as supply decreases and demand increases.

Year-on-year rental demand has soared in cities across the country. Rental demand is up 82.5 percent in San Jose, California, followed by San Francisco (66.9 percent), Austin, Texas (49.3 percent), Miami, Florida (48.9 percent) and Phoenix, Arizona (43 percent).

San Francisco saw the biggest jump in rents year-on-year at 11.8 percent. This means an apartment renting for $4,000 a month in September 2025 would be $4,472 in September 2026, on average.

It’s unlikely renters will get a break anytime soon, Jonathan Millar, an economist, told The New York Times this week.

He explained that landlords have the upper hand because they know demand is healthy and supply limited because high mortgage rates are also making it harder for construction companies to borrow money to build new apartment complexes.

“We’re not in deceleration world anymore, probably not going to get a lot of disinflationary pressures from rents,” Millar told The Times. “If anything, the risks are that we may be going the other direction.”

However there are some bright spots around the country where renters could see price drops, according to Zillow. Year-on-year rental demand is down 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).

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