Why are rents rising with inflation?

The short answer

• A historic construction surge brought roughly 700,000 completed multifamily units to market in 2024 according to U.S. Census Bureau and CoStar data, causing the three-month absorption rate of new units to fall from 75% in 2021 to 55% in 2024 and forcing landlords to offer concessions that brought annual rent growth down to 2.8%. [1] [2] [3]
• Rapid job creation and a post-lockdown boom in independent living arrangements drove asking-rent growth for professionally managed apartments up to 15.3% in early 2022 according to RealPage, establishing a high price baseline that rolled through multi-year lease renewal cycles and underpinned the 28.2% five-year rise. [4]
• Federal Reserve research found that multifamily property insurance costs rose more than 75% in real terms from $39 per unit monthly in 2019 to $68 per unit in 2024, while National Apartment Association benchmarks showed average operating costs reached $8,657 per unit, forcing landlords to lift rents to offset rising operational expenses. [5] [6]

What's driving the price

Political, regulatory and trade factors

• Invalidation of Federal Eviction Moratorium (Aug 2021 to Dec 2022), U.S. Supreme Court: The U.S. Supreme Court struck down the Centers for Disease Control and Prevention's federal eviction moratorium in August 2021, enabling property owners to regain possession of below-market units and reset lease rates to match prevailing market inflation while federal emergency rental assistance was delayed. [pushed prices up] [4]

Macro factors: supply, weather, disease, energy

• Wave of Multifamily Apartment Completions (Sep 2023 to Sep 2026): A historic construction surge brought roughly 700,000 completed multifamily units to market in 2024 according to U.S. Census Bureau and CoStar data, causing the three-month absorption rate of new units to fall from 75% in 2021 to 55% in 2024 and forcing landlords to offer concessions that brought annual rent growth down to 2.8%. [pushed prices down] [1] [2] [3]
• Post-Pandemic Household Formation and Asking-Rent Shock (Sep 2021 to Sep 2023): Rapid job creation and a post-lockdown boom in independent living arrangements drove asking-rent growth for professionally managed apartments up to 15.3% in early 2022 according to RealPage, establishing a high price baseline that rolled through multi-year lease renewal cycles and underpinned the 28.2% five-year rise. [pushed prices up] [4]
• Surge in Property Insurance and Operating Costs (Sep 2021 to Sep 2026): Federal Reserve research found that multifamily property insurance costs rose more than 75% in real terms from $39 per unit monthly in 2019 to $68 per unit in 2024, while National Apartment Association benchmarks showed average operating costs reached $8,657 per unit, forcing landlords to lift rents to offset rising operational expenses. [pushed prices up] [5] [6]
• Mortgage Unaffordability and the Rent-Versus-Buy Gap (Sep 2022 to Sep 2026): Elevated mortgage interest rates created a steep affordability gap between homeownership and leasing, according to TD Economics and the U.S. Census Bureau, locking prospective first-time buyers in the tenant pool and sustaining elevated occupancy across the nation's 42.5 million renter households. [pushed prices up] [3] [7] [8]

Supply chain right now

• Land and construction (moderate): Elevated financing costs drove new multifamily starts down 35% in 2026, though buildings completed over the prior two years continue to supply local markets. [2]
• Financing and taxes (critical): Higher borrowing costs and local property tax assessments, which consume 25% to 35% of total operating outlays, place sustained upward pressure on owner balance sheets. [9]
• Property operations (critical): Escalating property insurance rates and repair payrolls consume roughly 89 cents of every rental dollar collected, according to National Apartment Association data. [5] [9]
• Local rental market (stable): Higher vacancy rates and leasing concessions have cooled annual rent growth down to 2.8%, even as lingering high occupancy keeps nominal rents near historic highs. [1] [3] [10]

Researched 2026-10-18 with Google Search. Every point links to its sources; unsourced claims were removed.

Rent prices, last 12 months

Source: U.S. Bureau of Labor Statistics, Consumer Price Index (CPI-U), series CUUR0000SEHA.

Sources

1. Apartment Completions Rise Resulting in Slower Absorption Rates – Eye On Housing (eyeonhousing.org)
2. apartmentbuildings.com (apartmentbuildings.com)
3. U.S. Multifamily CRE: Still Soft Fundamentals and an Uneven East Coast (economics.td.com)
4. The New York Times (facebook.com)
5. Rising Property Insurance Costs and Pass-Through to Rents for Apartment Buildings (federalreserve.gov)
6. 30 Rental property operating expense statistics every investor should know (baselane.com)
7. Nearly Half of Renter Households Are Cost-Burdened, Proportions Differ by Race (census.gov)
8. America Counts: Stories About Housing (census.gov)
9. Rental Property Expenses (colonialpropertymanagement.com)
10. Apartment List National Rent Report (apartmentlist.com)

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