U.S. Rents Fall for 38th Month, but San Jose and San Francisco Reverse the Trend

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The national rental market is still getting cheaper on paper. In Silicon Valley, that relief has disappeared.

Median asking rent across studio, one-bedroom and two-bedroom homes in the 50 largest U.S. metropolitan areas fell 0.4% from a year earlier to $1,694 in September, according to Realtor.com’s October 15 rental report. It was the 38th consecutive month of year-over-year declines. But the annual drop was the smallest in three years, while some technology-driven and lower-cost markets moved in the opposite direction.

San Jose led the reported increases with a 6% annual jump to $3,565. San Francisco rents climbed 4.8% to $3,057. Realtor.com associates the tightening with demand linked to the Bay Area’s artificial-intelligence industry, although its rental-listing data cannot establish how much of the increase was caused by hiring at any particular company.

Landlord concessions fell markedly in both markets. In San Jose, 24.3% of listed rentals offered concessions, down from 51.9% a year earlier. San Francisco’s share dropped to 28.1% from 47.6%. Fewer advertised discounts and rising asking rents point to stronger landlord negotiating positions in those two markets, even as renters elsewhere continue to find incentives.

Nationally, nearly 43.9% of rental listings offered a concession, up 1.3 percentage points from September 2025. A concession can take the form of free rent or another incentive; the advertised monthly asking rent may therefore differ from the effective rent paid over the term of a lease.

The longer view tempers the apparent affordability improvement. September’s national median was roughly $80 below the August 2022 peak, but remained $214, or 14.5%, above the pre-pandemic level identified by Realtor.com. Households that have faced years of higher housing costs may find a modest annual decline insufficient to offset the earlier increase.

The report also shows a change in the markets where rents are rising. St. Louis shifted from a 4.4% annual decline a year earlier to a 2% increase. Minneapolis moved from a 3.4% decline to a 1.7% increase. Virginia Beach, Riverside and Las Vegas also crossed from negative to positive annual growth. Realtor.com points to demand for lower-cost alternatives, including rental searches originating in more expensive cities.

Meanwhile, the heavy wave of Sun Belt apartment construction continues to weigh on asking rents, though less aggressively. Austin’s annual decline narrowed to 2.3%, compared with 7.8% a year earlier. Phoenix’s decline eased to 1.9% from 5.8%, and Oklahoma City’s to 1.4% from 6.5%. That is a slowdown in rent deflation, not evidence that all three markets have returned to annual rent growth.

There is an important difference between this report and Zillow’s October 15 rental-demand release. Realtor.com’s figures describe asking rents for advertised units in the 50 largest metros; Zillow uses a separate observed demand index and its own typical-rent measure. The two series should not be combined into a single national rent figure or treated as directly interchangeable.

For apartment investors, the distinction between a national decline and local acceleration is central to underwriting. A market with rising concessions can require a different lease-up strategy than one where discounts are disappearing. Owners also need to distinguish headline asking rents from actual effective revenue, vacancy and operating expenses.

Realtor.com’s dataset includes apartments and certain private rentals, and its market comparisons depend on consistent listing coverage. It does not measure the rent paid by every tenant in an existing lease. September’s evidence suggests a rental market that is no longer moving uniformly downward, even though the national average remains below its prior peak.