Apartment Rents Show Signs of Bottoming Out
San Francisco has defied a national trend this month, leading the country in annual apartment rent growth and trouncing New York as the most expensive metro for two-bedroom units.
San Francisco also claimed the podium as the only top-10 city with double-digit rent growth and posted the fastest annual increase nationwide. Two-bedroom rents soared 21.3% to $5,120 — $50 more than in NYC. However, one-bedroom median rent at $3,630 was well behind New York's country-leading $4,250, but still marked a climb of 15.6% to second place.
San Francisco's story, however, was more the exception than the rule, according to the February 2026 national rent report prepared by Zumper, a digital marketplace for renters and property managers.
Nationally, it found annual rents continued to slump, though at a slower rate, suggesting that downward pressure may be easing. The median one-bedroom rent fell 1.7% anually to $1,499, while two-bedroom rent slipped 1.4% to $1,878.
To Zumper CEO Anthemos Georgiades, the more modest declines were early signs of rents moderating as the market begins to rebalance and of winter pricing returning to a more seasonal pattern after unusual rent cuts in the summer and fall.
"While it's still early, the consistency in recent data suggests fall 2025 may have marked a cyclical low for many rental markets, especially in supply-heavy Sun Belt and Mountain West regions that are still working through excess inventory," Georgiades commented.
"Overall, February's national data points to a rental market that is stabilizing, though not yet positioned for rapid growth," Zumper noted.
It attributed the ongoing pullbacks in national rent growth to excess apartment supply, which is expected to normalize this year. While a gradual, steady recovery is anticipated, landlords are still forced to compete for tenants, which limits their near-term pricing power.
"San Francisco is a clear example of how quickly rent growth can reaccelerate in supply-constrained markets," said Georgiades.
"Renewed job growth tied to AI and a gradual return to in-office work are pushing demand back into the market, particularly for larger units, at a time when new supply remains limited."
The case of Tennessee, however, shows how difficult recovery can be. Once a state with rising rents and growing supply, Zumper found that rents across the state have dropped across the board. In Knoxville, annual prices slipped by 13.2%, Memphis declined 9.5%, Chattanooga by 8.7% and Nashville dipped by 5.7%. Nashville saw 8,200 new units delivered in the past year, driving vacancy to a 20-year high.
Construction pipelines are already beginning to dry up.
"But for now," Zumper stated, "renters looking for a new home in the [Memphis] area can enjoy concessions that include up to three months of free rent, waived fees, and various move-in credits."
Source: GlobeSt/ALM