According to Realtor.com Research, we are now seeing the thirty-seventh consecutive month where rents have declined on a year-over-year basis across the country's largest metros. For studio, one-bedroom, and two-bedroom units, rents are down roughly one percent compared to last year, with the typical asking rent sitting at sixteen hundred ninety-nine dollars. While this is still meaningful money above what we saw back in twenty nineteen before the pandemic, it represents real relief from the peak prices we hit a few years back in twenty twenty-two.
What really caught my attention in this report is the shift in landlord behavior. Almost forty-four percent of rental listings in the largest fifty metros are now offering some kind of concession to tenants. That could be waived fees, a period of free rent, rent credits, or other incentives. A year ago, that number was closer to forty percent, so landlords are increasingly sweetening the deal to keep their properties leased. The report also notes that about thirty-one percent of rentals are specifically offering free rent periods, which translates into real monthly savings for people signing leases.
The Bay Area tells a different story, though. According to the Realtor.com analysis, both San Jose and San Francisco are actually seeing faster rent growth right now at around four and a half to four and a half percent annually. Correspondingly, the concession rates in these two markets have dropped meaningfully year-over-year, which makes sense when demand is still outpacing supply. The report attributes this to the artificial intelligence job boom and the demand for housing that comes with it.
Landlords are also getting more deliberate about concessions. Some are offering them not just as a one-time tactic when they have a problem tenant spot, but as an ongoing pricing strategy. The research shows that about five percent of institutional rental communities have offered concessions continuously for the past twelve months. Some of that reflects real market softness in certain areas, but other times it seems like a strategic choice to keep rents at certain levels while offering tenants real value.
What I am seeing locally here in the Bay Area and out in the East Bay is a tale of two rental markets unfolding right now. In San Jose and San Francisco, where tech job growth is still creating strong demand, landlords are holding firm on asking rents and pulling back on concessions. But in other pockets of the region, we are seeing landlords get more creative with their lease offers. For sellers and buyers in the for-sale market, this rental dynamics matter because strong rental demand in certain neighborhoods continues to support home values, while softer rents elsewhere suggest we need to think carefully about investment properties and long-term appreciation potential.
