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73 September 2025 J O U R N A L themortgagepoint.com September 2025 » easing rental pressure in the U.S. rental market, according to the July Realtor. com Monthly Rent Report. Despite the consistent drop in rents, a growing pullback in multifamily development, fueled by increasing construction costs and new tariffs on building materials like lumber, aluminum, and steel, is sig- naling potential trouble ahead for future rental supply. The study found that the median asking rent for zero- to two-bedroom properties in the 50 largest metros fell to $1,712 in July, a $43 (-2.5%) decline year- over-year. While monthly rent growth continues to follow a typical seasonal pattern, it has consistently lagged behind last year's pace, indicating a persistently cooler rental market. Rent prices remain $254 (17.4%) higher than their pre-pandemic levels, but are now $47 (-2.7%) below the peak level reached in August 2022. "Rents have now declined for two full years, giving renters more leverage and financial breathing room than they've had in some time," said Danielle Hale, Chief Economist at Realtor.com. "But there are early signs that relief may not last forever. Developers are pulling back in key markets, and construction headwinds—especially tariffs on steel, lumber, and aluminum—could create a shortfall in new rental supply down the line." The National Association of Home Builders (NAHB) estimates that $204 billion worth of goods were used in the construction of both new multifamily and single-family housing in 2024—$14 billion of those goods were imported from outside the U.S., meaning approx- imately 7% of all goods used in new residential construction originate from a foreign nation. In June 2025, multifamily comple- tions for buildings with two or more units fell 38.1% year-over-year, dropping from a seasonally adjusted annual rate of 656,000 units in June 2024 to just 406,000. This significant decline reflects the growing challenges facing devel- opers, including elevated construction costs, shrinking profit margins due to lower rents, and newly expanded tariffs on imported building materials. The impact is being felt unevenly across the country, as the Midwest saw the steepest annual drop in completions (–55.7%), fol- lowed by the South (–33.5%), Northeast (–33.0%), and West (–28.9%). Owners of multifamily units have resorted to offering renter concessions to attract or retain tenants, thus reduc- ing the cost of renting a property for a specific period, including free rent for a month, reduced rent, waived fees (like application or pet fees), or even free amenities, for example. Recent data from Apartments.com examined the tactics landlords are using to attract renters in today's marketplace. With affordability still top of mind for many, incentives like a free month of rent are emerging as leverage for property owners seeking to house tenants. The study found that 36% of renters said a free first month or rent would be the strongest factor in signing a lease when choosing between comparable apartments. With the strength of concessions as a driver for landlords, the Apartments. com survey found that 88% of renters said they would consider overlooking minor flaws in an apartment for a good rent concession, while nearly a third of renters value a rent concession that provides ongoing value throughout the term of their lease, and 95% of renters said a concession mentioned in a listing would make them more likely or poten- tially more likely to inquire about the property. Local Permitting Trends Vary Permitting trends across large metro areas show that some markets are already feeling the effects from higher construction costs and compressed profits: • Orlando, Florida: Permits for multi- family units dropped -54.9% from Q1 to Q2 2025—the first Q2 decline since 2022. • Philadelphia, Pennsylvania, and San Antonio, Texas, also saw their first Q2 permitting dips in three years. • Charlotte, North Carolina, and Las Vegas experienced their largest quarterly permitting declines in Q2 since 2022. • San Francisco, California, which saw a modest increase, posted its slowest Q2 growth in permitting in three years.