Last Year's Hottest Rent Markets Are Now Posting Declines
The states behind some of the biggest rent increases of 2025 are now seeing average payments fall. Montana, New Jersey, New York and California all posted double-digit gains last year and have turned negative in 2026, according to Rentec Direct's State of Rent 2026 report.
The turnaround shows how quickly rent momentum can change at the state level, even while the national average barely moves. In several large markets, last year's performance has turned out to be a poor guide to this year's.
Four States Swing From Gains To Declines
Montana had the sharpest turn. Average rent paid in the state fell 12% in 2026 year-to-date after rising 11% in 2025. New Jersey dropped 9% after a 16% increase, and New York fell 8% after a 15% gain. California's decline was smaller, at 3%, but it came after a 14% jump.
In New Jersey and California, the pullbacks are happening at the top of the market. California had the highest average rent paid in the country in 2025 at $2,399, and New Jersey ranked third at $2,037.
Growth Moves To Other Markets
As those states cooled, others picked up speed. Hawaii posted the biggest jump, with average payments up 28% in 2026 year-to-date after 3% growth last year. Hawaii ranked second in 2025 with an average of $2,185, and it's now approaching $2,800. Idaho rose 14%, also after 3% growth the year before.
North Dakota and New Mexico went from declines in 2025 to gains of 10% and 9%. North Dakota's increase builds on one of the lowest bases in the country. Its 2025 average of $840 ranked third lowest.
"One of the more surprising findings was seeing some of the largest rent increases occur in relatively affordable markets like Louisiana, South Dakota and Minnesota — not just in traditionally high-cost markets like California and New York," said Nathan Miller, founder and CEO of Rentec Direct.
National Growth Nearly Stalls
These state-level swings sit under a national average that has hardly moved. Average monthly rent paid reached $1,388 in 2026 year-to-date, up from $1,368 in 2025. That's about 1% growth, down from 5% the year before.
The slowdown hasn't erased earlier gains. The national average was $993 in 2019.
"Rent growth is slowing, but affordability pressures remain," Miller said. "Nationally, the pace of rent increases is beginning to moderate, but average rents are still almost 40% higher than they were in 2019."
Tracking What Renters Actually Pay
Rentec Direct's analysis tracks actual payments under existing leases, not advertised rents for vacant units. Existing lease rates, rent control policies, discounts and negotiated prices can all open a gap between asking rents and what tenants pay.
Those payments still vary widely by state. West Virginia had the lowest average rent paid in 2025 at $773, followed by Nebraska at $838 and North Dakota at $840. Seven states had averages below $1,000.
Source: GlobeSt/ALM