Realtor.com's Rent Report: Is the Parking Lot Full for Lower-Cost Renters?

The headline says rents are finally cooling. That's true, in a way. The national median asking rent has been declining for the 29th consecutive month, hitting $1,689 last December. But the real story is in the split beneath that average. This "relief" is happening at the top of the market, not the bottom.

Look at the data since before the pandemic. From December 2019 to December 2025, the median rent climbed 16.9%. But the 25th percentile-representing the lower-priced rentals where many budget-conscious renters look-rose a steeper 19.9%. Meanwhile, the 75th percentile, or higher-priced units, saw a more modest 12.5% increase. In other words, the biggest price hikes have been in the segment renters can least afford, while the biggest markdowns have been in the luxury end.

This creates a clear squeeze. The recent softening in the median is driven almost entirely by concessions and slower growth at the high end, where landlords are competing for tenants. For someone hunting for a more affordable place, the picture is less rosy. The data shows that lower-priced rentals have seen the most rent growth since before the pandemic, and they've seen relatively little of the recent relief. The headline number hides this critical split.

Who's Getting Hit: The Real Affordability Squeeze

The relief in the headline rent number is a luxury few can afford. The data shows that the pressure is hitting a very specific group: renters who need to live on the lower end of the wage scale. In only 5 of the 50 largest metros can two minimum-wage workers afford the median rental. That leaves 45 major cities where the basic math doesn't work, a situation that has only gotten worse as rents have climbed.

This squeeze is being made worse by the removal of a key safety net. The federal Emergency Rental Assistance (ERA) program, which provided over $46 billion to keep families in their homes during the pandemic, has now ended. That program was a critical lifeline for low-income renters, and its departure means there's less financial cushion when rents spike or paychecks fall short.

For these renters, the logical response is to seek more affordable options. But here's the problem: the very segment they need-lower-priced rentals-has seen the strongest price growth since 2019. While the median rent has cooled, that easing has been concentrated at the high end. The lower-priced units, where budget-conscious renters look, have risen even faster. So when someone tries to "downgrade" to save money, they often find that the cheaper places have become more expensive, too. It's a double bind: the safety net is gone, and the exit ramp is getting steeper.

What This Means for the Real Economy

The on-the-ground reality of this bifurcated rental market has clear ripple effects for the broader economy. The recent rent compression, where the biggest markdowns are happening at the high end, suggests demand is shifting. More renters are being forced to look for options in the lower-cost segments, which puts pressure on the value of higher-end rental properties. Landlords at the top are offering more concessions to fill vacancies, but the competition for the most affordable units remains tight. This dynamic favors properties in the most affordable segments, where demand is resilient, over those at the top, where the market is softening.

For the economy, this creates a complex risk/reward profile. On one hand, the softening at the high end may dampen overall housing market activity and consumer spending in the near term. When higher-income renters see their monthly housing costs ease, they may have a bit more discretionary cash. But that relief is concentrated and doesn't reach the people who need it most. The lack of meaningful relief for lower-cost renters means their budgets are stretched thin, which can suppress spending on other goods and services. This is a key vulnerability: a consumer base that is already squeezed by inflation and wage stagnation has less room to spend.

The bottom line is that this split market is a headwind for broad-based economic growth. The headline rent decline is a sign of cooling, but it's a cooling that isn't helping the people who are most sensitive to price changes. When budget-conscious renters can't afford to move to cheaper places because those places have also become more expensive, they are stuck. This stagnation in housing mobility can slow down the labor market and limit consumer spending power. For now, the economic benefit of lower rents is being captured by a narrow slice of the market, while the broader population faces a persistent affordability squeeze.

What to Watch: Simple Metrics for the Street

The thesis here is that the headline rent relief is a mirage for the people who need it most. To see if this holds, you need to watch a few simple, observable things. The first is the next rental report. The streak of 29 consecutive monthly declines is notable, but the real test is whether it continues and, more importantly, whether the 25th percentile growth accelerates. If the lower-priced segment sees even steeper gains while the median keeps falling, the squeeze tightens. The recent data shows the decline is flattening, which could signal the easing is running out of steam. Watch for that trend to reverse or persist.

Second, monitor state and local minimum wage changes in 2026. These are direct levers on affordability. The evidence already notes that two more metros are slated to join the list of affordable cities after minimum-wage increases in Michigan and Florida. That's a concrete policy shift that will affect the budget math for many renters. If these hikes are significant, they should show up in future reports as a slight improvement in the "two minimum-wage workers afford median" metric. It's a tangible, ground-level check on whether policy can ease the pressure.

Finally, track the effectiveness of new local housing policies. Cities are trying to build more affordable units, often through measures like inclusionary zoning. The evidence from Baltimore highlights an Inclusionary Housing Board seeking a tenant member, showing these programs are active. The key question is whether they are actually adding supply to the lower-priced end of the market. If these policies are working, you'd expect to see a widening in the 25th percentile data, not just a continuation of its steep climb. If not, the affordability gap will likely keep growing.

The bottom line is to keep it simple. Watch the numbers that renters actually feel: the rent for the cheapest places they can afford, the wages they earn, and the local rules that govern housing supply. If those three things don't align, the headline numbers will keep telling a story that doesn't match the real-world struggle.