Why Rents Are Plummeting in These 6 Cities, According to Experts
Written by
Laura Beck
Edited by
Zuri Anderson
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Rent prices seem to head in one direction – and that direction is up. But that’s not the case in every city – in fact, some surprising cities are seeing a major downturn in rental prices.
A recent report from Realtor.com has identified six major cities where rents are beginning to plummet despite ongoing affordability issues in the rest of the country.
The cities in question – Miami, Los Angeles, New York City, San Diego, Boston and Riverside, California – have long been synonymous with sky-high living costs. However, a combination of factors is now causing a reversal in this trend, leading to what experts are calling a “rental market correction.”
To understand this phenomenon, GOBankingRates spoke with Anthony DeLuca, a financial expert from RetireGuide, who provided insights into the forces driving this unexpected change.
Here’s why rents are plummeting in six cities.
There are also five places where the cost to rent a two-bedroom home is plummeting.
The Lingering Impact of the COVID-19 Pandemic
DeLuca pointed out that the pandemic has played a large role in reshaping rental markets across the country.
“Many Americans were fleeing more liberal-run states to escape the strict COVID restrictions that were enforced,” he said.
The dwindling citizens of these major urban centers led to a decrease in demand for rentals, forcing landlords to lower prices to attract new tenants.
Because many people started working from home during the pandemic, they rethought their living situations. Why live in a high-priced metropolis when renters could get way more room for way less money in other smaller towns?
The fallout from those moves is now affecting the rental prices in these bigger cities.
The Tax Factor
Another important element in this rental market shift is taxation.
“Almost all the states that Americans are moving towards have lower or no state income tax,” said DeLuca. “Juxtapose this to the cities they are leaving which have higher state income tax.”
This difference in tax burdens is a major driver of migration patterns. People want to max out their take-home pay, and so they are drawn to states with tax structures that help them out.
Inflation and Cost of Living
As with most things, what’s happening with the broader economy affects the rental market.
“Shutting down an economy, choking the supply chain and then following this up by raising the Federal fund rate skyrocketed inflation,” DeLuca shared.
This inflationary pressure has made life in already expensive cities even less affordable. As a result, it’s no surprise that people are moving out.
Interestingly, the Realtor.com report highlighted that the most affordable rental markets are now found in mid-sized cities like Oklahoma City, Kansas City, Missouri, and Columbus, Ohio — a pretty major contrast to the traditional coastal powerhouses.
The ‘Silver Tsunami’
A demographic shift that’s often overlooked in discussions of housing markets is what DeLuca calls the “Silver Tsunami.”
“The baby boomers are retiring at a clip of 10,000 people a day. They are moving south,” he said.
This mass migration of retirees is reshaping rental markets across the country. As boomers leave northern cities for sunnier climates, they’re creating increased demand (and thus, higher rents) in southern states while simultaneously reducing demand in the cities they’re leaving behind.
The Migration Equation
To put these trends into perspective, DeLuca shared some interesting statistics.
According to U.S. Census data for net migration from July 2021 to July 2022, Florida saw an influx of 1,218 new residents per day while Texas welcomed 958. On the other hand, states like California, New York, and Massachusetts – home to some of the cities experiencing rent decreases – all saw negative net migration.
This migration pattern is backed up by a U.S. News report on the fastest-growing places in 2024 and 2025, which found that seven of the top ten cities were in Florida, with the remaining three in Nevada, Texas and Louisiana.
The Ripple Effects
Of course, there are good and bad news here. Lower rents mean more accessibility for people who want to move to these areas. But it also means that investors might see their returns diminish.
And of course, when these cities start to experience a mass influx of residents because of lower rents, eventually you’ll see rates start to rise again. As with most things, it’s a cyclical journey.
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