U.S. Rental Market Shifts Favorably for Tenants
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 17 2026
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Should l Buy NWS?
Source: PRnewswire
- Rising Vacancy Rates: The average rental vacancy rate across the 50 largest U.S. metros reached 7.6% in 2025, up from 7.2% in 2024, indicating a significant shift in favor of tenants in 44 markets, fundamentally altering the market landscape.
- Continued Rent Declines: The national median asking rent fell by 1.5% year-over-year to $1,672, marking the 29th consecutive month of rent declines, which enhances tenant bargaining power and promotes a move towards market equilibrium.
- Milwaukee's Dramatic Shift: Milwaukee's vacancy rate surged from 4.9% in 2024 to 10.8% in 2025, exemplifying the dramatic transformation in the rental market and highlighting significant changes in supply-demand dynamics.
- Local Market Challenges: While the national trend favors tenants, areas like Pittsburgh and Richmond have shifted to balanced conditions due to increased demand from out-of-state renters, underscoring the fragility of tenant-friendly conditions and the critical need for supply-demand balance.
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Analyst Views on NWS
About NWS
News Corporation is a diversified media and information services company. Its Digital Real Estate Services segment consists of the Company's interest in REA Group and Move. REA Group is a digital media business specializing in property and property-related services on its Websites and mobile apps. Move is a provider of digital real estate services in the United States and primarily operates Realtor.com, a real estate information, advertising and services platform, its referral-based services, online tools and services to do-it-yourself landlords and tenants. Its Dow Jones segment includes Dow Jones, a global provider of news and business information, which distributes its content and data through a variety of media channels. Its Book Publishing segment consists of HarperCollins, a consumer book publisher with operations in 15 countries. Its News Media segment consists of News Corp Australia, News UK and the New York Post and includes The Australian, The Daily Telegraph, among others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Impact of Rent Control Reform: In December 2025, the city enacted its most significant rent control reform in four decades, capping annual increases at 4% for approximately 74% of rental units, which provides tenant protection but may also exacerbate mobility issues for renters.
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See More
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- Rising Rent Costs: In Q1 2026, New York City's median asking rent reached $3,616, reflecting a 6.2% year-over-year increase, which exacerbates the financial strain on renters and limits their housing options in an already tight market.
- Widening Rent Gap: The median contract rent for current tenants is $1,855, creating a rent gap exceeding $1,750, necessitating an additional $70,440 in annual income to maintain the 30% affordability threshold, highlighting the economic burden of moving.
- Rent Increases Across Boroughs: Manhattan saw an 8.3% rise in median rent to $4,878, requiring an annual income of $195,120, while Brooklyn, Queens, and the Bronx also experienced significant rent hikes, indicating a widespread trend of increasing rental costs throughout the city.
- Potential Impact of Rent Freeze: With approximately 42% of NYC's rental units being rent-stabilized, a proposed freeze could provide immediate relief to nearly one million households, but it risks further widening the rent gap, making it increasingly difficult for tenants to relocate for better opportunities or living situations.
See More
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- Widening Rent Gap: The average contract rent for current tenants is $1,855, while the rent gap exceeds $1,750, making relocation nearly impossible; with a rent freeze policy potentially taking effect, this gap may widen further in the coming years.
- Citywide Rent Increases: All boroughs experienced rent hikes in Q1 2026, with Manhattan seeing an 8.3% increase to $4,878, necessitating an annual income of $195,120, while Brooklyn, Queens, and the Bronx also reported significant increases, highlighting widespread rental pressure across the city.
- Surge in Demand for Smaller Units: The median asking rent for 0-2 bedroom apartments rose 7.6% to $3,480, indicating a shift as renters seek smaller, more affordable options, intensifying competition and contributing to upward pressure on rental prices.
See More
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- Declining Land Inventory: Since Q1 2019, U.S. land inventory has decreased by 23.6%, indicating a failure to recover post-pandemic, leading to tight land supply and potentially higher costs for future new homes.
- Surging Land Prices: In Q1 2026, the median price per acre for land reached $62,365, reflecting a 76.6% increase since 2019, highlighting the supply-demand imbalance exacerbated by the construction boom during the pandemic.
- Regional Market Disparities: The Northeast has seen land prices grow by 101.5% since 2019, while the West only experienced a 32.2% increase, illustrating varying market dynamics and development constraints affecting land availability and pricing.
- Raw Land Outperformance: Prices for raw land have surged by 86.5% since Q1 2019, compared to a 53.3% increase for build-ready lots, indicating stronger investor demand for raw land despite overall market challenges.
See More
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- Surging Land Prices: The median price per acre of land has increased by 76.6% since Q1 2019, with the Northeast experiencing the highest growth at 101%, reflecting structural constraints on land supply in that region.
- Raw Land Outperformance: Prices for raw land have risen by 86.5% since Q1 2019, compared to only 53.3% for build-ready lots, indicating stronger market demand for raw land despite overall price pullback pressures.
- Regional Market Disparities: The Western region has seen a year-over-year decline of 5.9% in land prices, contrasting sharply with other regions, indicating a slowdown in construction activity and reduced land demand, which may affect future new home costs.
See More
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- Significant Price Increases: The median price per acre of land has surged by 76.6% since Q1 2019, with the Northeast experiencing the highest increase at 101%, reflecting structural constraints on land supply that intensify market competition.
- Raw Land Outperformance: Prices for raw land have risen by 86.5% since Q1 2019, compared to only 53.3% for build-ready lots, indicating stronger investor demand for raw land despite an overall market slowdown.
- Regional Disparities: The West has seen a year-over-year decline of 5.9% in land prices, contrasting sharply with other regions, highlighting a slowdown in construction activity and a return to pre-pandemic inventory levels, which may lead to increased future land development costs.
See More
