Rent Inflation: What to Expect This Year
Rent inflation has shaped the housing landscape for years—through peaks, slowdowns, and affordability crises. Heading into 2026, where are we headed? Will rents continue to ease, or is a rebound on the horizon? Here’s a detailed breakdown of trends, forecasts, and what renters need to know.
1. Rent Inflation to-Date: A Slowdown But Elevated Base
After records in 2021–22, rent growth is decelerating. But high levels persist:
- Zillow forecasts 2025 single-family rent growth at ~2.7% (down from 4.5%), with multifamily slowing to 1.3%.([turn0search5])
- Apartment List reports July rent growth is flat month-over-month and down 0.8% year-over-year, suggesting cooling.([turn0search9])
- Yet, rent remains elevated—up roughly 36% since pre-pandemic levels—even as growth slows.([turn0search5])
2. Forecasts for 2026: Steady Gains, Market Shifts
- Origin’s Multilytics model predicts most U.S. markets return to positive rent growth by January 2026, with several seeing gains above 3–4%.([turn0search0])
- Decreased housing completions and low vacancy—down nearly 50% in multifamily starts—could fuel rising rents later in 2026.([turn0search8], [turn0search10])
3. Why Rent Inflation Is Sticky—and What That Means
Rent inflation often behaves differently from volatile costs like food or energy:
- Leases, particularly annual ones, lock in rents—making inflation slow to reflect real-time pressure.([turn0search1])
- Models project “shelter inflation” to remain elevated—around 4.8%—into 2025 based on lagging reporting.([turn0search19])
4. Affordability Under Strain—Globally
- In England, renters now devote over 36% of income to rent—Londoners spend 41–75%, far above the 30% affordability threshold.([turn0news21])
- In the U.S., shelter costs contributed heavily to April 2025 CPI increases—rents up nearly 29% for apartments and 43% for single-family homes over five years.([turn0news26])
- Australia also saw a 10.1% rent increase between 2022 and 2023 amid historically low vacancy rates.([turn0search34])
5. What Could Drive Rents Higher Again?
- High construction costs and declining supply limit new rental stock.([turn0news26])
- Strong demand—driven by limited homeownership options—fuels competition for rentals.([turn0news28])
- Persistent low vacancies, especially in some Sunbelt markets, may reinvigorate rent growth.([turn0news28])
6. Summary Table: Rent Inflation—Now and Soon
| Metric | Current Trend | 2026 Outlook |
|---|---|---|
| Single-family rent growth (U.S.) | ~2.7% | Gradual rise expected in select markets |
| Multifamily rent growth | ~1.3% | Steady low-mid single digits, dependent on location |
| Affordability | High burden globally | Continued pressure if incomes stagnate |
7. Advice for Renters in 2026
- Track local trends—some metros may still see declines while others rebound.
- Renew or lock in leases when growth appears to soften.
- Advocate for rent regulation in high-burden regions.([turn0search32])
- Consider shared housing or relocation to curb escalating costs.
Final Thoughts
Rent inflation may have cooled its heat—but its effects remain deeply embedded. Expect continued, uneven growth in 2026 shaped by housing supply, demand dynamics, and policy responses. For renters, vigilance, flexibility, and proactive strategy are more important than ever.