Renters got relief with falling prices for apartments – but don’t expect it to continue

An increase in the number of apartments being built has resulted in lower rent prices in some parts of the country, but that relief could come to an end in 2026.

Realtor.com data for November, found that the national average rent across the 50 biggest metropolitan areas in the nation dropped 1% year-over-year.

Urban areas like Austin and Denver reported some of the more significant rent cuts, while denser metros — like New York, Washington, D.C., Chicago and San Francisco — reported either no change to rent prices or higher prices.

While the drop in rent for some Americans was no doubt a relief, it's likely to be short lived.

U.S. Census and U.S. Department of Housing and Urban Development data released on Friday reported that the construction of new apartments has fallen off in the last year. With fewer new apartments coming on the market, the demand for units will likely grow, allowing management companies to raise rents as a result.

Daryl Fairweather, the chief economist for Redfin, told NBC News that conditions in 2026 could make finding an affordable apartment difficult for renters.

“Fewer housing projects are being started and fewer are being completed, which goes to show that the pandemic building boom is over,” he told the broadcaster. “This will limit inventory of both homes for sale and rent moving forward, which will exacerbate the housing shortage.”

The data — which was compiled in October but released on Friday — shows a year-over-year decline for residential apartment construction.

Since October 2024, the number of new apartment construction projects has fallen by 11 percent. It also found that project completions fell by nearly 42 percent when compared to October 2024.

It's not all bad news. The data also found an increase in permits authorizing new apartment construction, suggesting that — even if those projects have not started yet — there are more on the way.

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Robert Dietz, the National Association of Home Builders’ chief economist, told NBC News that it can take more than a year and a half for a construction project to go from the permit acquisition stage to completion. It's unlikely many projects not currently underway will finish in 2026.

The decline in new builds is the latest symptom of the nation's ongoing affordability crisis. Homebuilders are facing higher interest rates, a need to pay higher wages, higher fees for building, and higher material costs. The increased costs makes building projects more expensive.

Those pressures are more present in dense urban environments. Construction in small towns and less-dense cities — like in the Midwest and the Sunbelt — saw construction increases over the last year.

Many of the less-populated areas that saw increases in apartment construction also saw decreases in rent prices.

Affordability is also a concern for homebuyers. The cost of homes has kept many who might otherwise choose to buy a home stuck in the rental market, which pressures the available housing stock and pushes rent costs higher.

Dietz noted to NBC News that “housing affordability crisis manifests itself both in terms of frustrated prospective homebuyers who rent longer as well as households who do not form, which means young adults living with their parents and then also doubling and tripling up with roommates.”