Zillow: Rent Growth Speeds Up to 2.7% as Mortgage Rates Climb

Rent growth across the United States picked up again in September, according to the latest monthly market report from Zillow, released October 6. The company's rent index put the typical asking rent at $1,932, up 2.7% from a year earlier and 0.1% from August. Zillow said that is the largest annual increase since April 2025 and noted that yearly rent growth has sped up every month since April, for both apartments and single-family rentals.

The finding marks a shift from much of the past two years, when a historic wave of new apartment buildings kept rent increases modest in most of the country and handed tenants unusual bargaining power.

Why rents are firming

Zillow ties the pickup to the for-sale market. Its report put average mortgage rates at 7.28%, the highest level since November 2023, and said monthly mortgage payments were up 6.7% from a year earlier even though home values rose only about 1%. Newly pending home sales fell 8.5% year over year. Zillow chief economist Mischa Fisher said in the report that buyers on the margins are finding the monthly savings from renting too good to pass up.

When households that might otherwise buy stay in apartments and rental homes, demand for leases rises. That is happening as the pipeline of new apartment construction thins. In its August report, Zillow put annual rent growth at 2.5%, up from 2.3% in July, so September's reading continues a steady climb rather than a one-month spike.

Deals have not disappeared

Despite faster rent growth, landlords are still offering incentives. Zillow said 39.6% of rental listings on its platform included a concession in September, such as free weeks or reduced fees, up from 37.4% a year earlier. Renters spent about 26.3% of median household income on rent, according to the report.

That combination matters for anyone signing a lease this fall: asking prices are creeping up, but a large share of landlords still compete for tenants with move-in specials.

Where rents moved most

Among major metros, Zillow reported the fastest annual growth in San Francisco, at 11.8%. At the other end, rents were flat in Denver and down 0.7% in San Antonio, two markets where heavy recent construction has left more vacant units for landlords to fill.

Other trackers show slower gains

Zillow's index is not the only gauge, and measures differ depending on which listings they track. Apartment List, which focuses on new leases, reported a national median rent of $1,388 in September, down 0.4% from a year earlier, though it described the trend as a rebound from deeper declines earlier in 2026. Apartments.com put its national average at $1,752, with annual growth of 1.5%. All three point in the same direction: the period of falling or flat rents is ending, and modest increases are returning.

What it means for renters

• Ask about concessions before you sign. With roughly two in five listings offering a deal, it is reasonable to ask for a free month, waived application or amenity fees, or a lower deposit, especially on units that have been listed for several weeks.
• Compare the effective rent, not just the sticker price. A month free on a 12-month lease lowers the effective monthly cost by about 8%, but your renewal will usually be priced off the full rent.
• Consider locking in a longer lease. If rent growth keeps accelerating, a 15- or 18-month lease signed during the slower fall and winter season can delay your next increase.
• Prepare for renewal offers. Check what comparable units in your building and neighborhood list for. If your landlord's renewal is well above the market, that data gives you leverage to negotiate or a reason to move.
• Revisit the rent-versus-buy math. With mortgage rates above 7%, Zillow's data suggests renting remains the cheaper monthly option in much of the country, but that gap can change quickly if rates fall.

The bottom line: renters still have more leverage than they did during the 2021-2022 surge, but that window is gradually narrowing as the construction boom fades and more would-be buyers stay in the rental market.