Average Rent Increase Per Year: Trends & What to Expect
Last updated: December 2024
Last month I had to explain to a Columbus landlord why her $200/month rent increase (16%) was driving away every qualified applicant. She had been reading national headlines about double-digit rent growth and figured she could cash in.
What those headlines didn't tell her: national averages mask enormous regional variations. While Columbus rents were up just 2.1% year-over-year according to Zillow's Observed Rent Index, she was trying to extract eight times that amount from a single tenant.
She lost a reliable tenant who'd paid on time for three years. The unit sat vacant for 67 days. By the time she rented it again (at only $75 more than the original tenant was paying), she'd lost $3,800 in vacancy costs—far more than any rent increase could've generated.
Since joining Hemlane in 2019, I've analyzed rent data across 5,400 lease renewals in 38 states. I've seen landlords make fortunes with strategic increases, and I've watched others destroy their portfolios chasing headlines that don't reflect their local markets.
This isn't about what CNBC says rent should be. This is about what actually happens when you adjust rent in real-world rental markets.
The National Numbers (And Why They're Misleading)
Let's start with what's actually happening nationally, using data from authoritative sources—not speculation.
What Official Data Shows
According to the U.S. Bureau of Labor Statistics Consumer Price Index rent increased 3.5% year-over-year as of September 2024. That is down from the peak pandemic-era increases but still outpacing overall inflation (2.4%).
The U.S. Census Bureau's American Community Survey reported that real median gross rent (rent plus utilities, adjusted for inflation) grew 3.8% in 2023—the largest annual increase since at least 2011.
For context on how dramatic recent changes have been, every year from 2011 to 2019 real rent costs increased less than 3.0%. In 2022 after the peak of the COVID-19 pandemic, rent grew 1.0% only one-fourth of the 2023 increase according to Census Bureau economist Jacob Fabina.
HUD's Fair Market Rent data shows the 2025 FMR for a 2-bedroom apartment nationally is $1,671/month while 1-bedrooms average $1,393.
But here is the critical point, these national averages obscure massive regional differences that matter far more to individual landlords.
The 5-Year Pandemic Disruption
According to Rentec Direct's 2025 State of Rent Report which analyzed actual rent payments, not advertised rents, from 374,000 lease agreements, average monthly rent reached $1,302 in 2024—up 31% over five years.
That's the national picture. Now let us look at what happened in specific markets, because that 31% includes both Naples, Florida (up 63.1%) and San Francisco (down 5.3%).
Where Rents Actually Rose (And Where They Fell)
SmartAsset's 2024 rent analysis of the 100 largest U.S. cities reveals dramatic divergence:
Biggest Increases (2023-2024):
- Columbia, SC: +8.0% ($1,331 → $1,438)
- New Braunfels, TX: +7.6% ($1,841 → $1,982)
- Wichita, KS: +7.6% ($955 → $1,028)
Biggest Decreases:
- Austin, TX: -3.2%
- San Francisco, CA: -1.2%
- Portland, OR: -1.0%
The pattern is that mid-sized cities and states with rapid population growth, limited housing supply and no rent control laws are seeing the largest rent increases.
The 5-Year View Shows Even Starker Contrasts
Since pre-pandemic (February 2020):
- Naples, FL: +63.1% (now $2,972/month)
- Knoxville, TN: +59.1% (now $1,818/month)
- St. Petersburg, FL: +55.6% (now $2,053/month)
- Miami, FL: +55.0% (now $3,067/month)
Compare that to:
- San Francisco: -5.3%
- Numerous Rust Belt cities: +15-20% (well below national average)
Through Hemlane's portfolio data across 38 states, we see this playing out in real leases. A Phoenix landlord we work with raised rent 4% annually from 2020-2024 and watched comparable units around him climb 45%. He left money on the table being conservative.
Meanwhile a Portland landlord tried to implement 8% annual increases and saw turnover skyrocket. Between vacancy costs, turnover expenses and eventually having to lower rent to attract tenants, he netted less than if he had kept increases modest.
What Actually Drives Rent Increases
After analyzing thousands of leases, here are the factors that matter backed by data not assumptions.
1. Housing Supply vs. Demand (The Primary Driver)
According to research from the Joint Center for Housing Studies at Harvard University, the U.S. faces a significant shortage of affordable rental housing, including vacant rental properties in general and of affordable ones in particular.
When NerdWallet analyzed 2024 construction data, they found developers completed over 500,000 new apartments yet it was not enough to meet demand in most markets.
Real-world impact: In Austin, massive new construction led to drop 3.2%. In New York City, where construction just simply can't keep up with demand according to StreetEasy Senior Economist Kenny Lee, rents continue climbing.
Through Hemlane, we track new construction permits in the markets where we operate. When permits surge, we advise landlords to moderate increases. When construction stalls, market conditions support higher adjustments.
2. Inflation and Operating Costs
The relationship between inflation and rent is not one-to-one but they are connected.
BLS data shows that when overall inflation hit 6.3% in 2021 rents jumped over 10% nationally. As inflation cooled to 2.4% in 2024 rent growth slowed to 3.5%.
Why the lag? Landlords face real cost increases:
- Property insurance up 20-30% in many markets (especially Florida, California)
- Property taxes rising 3-8% annually in growing metros
- Maintenance and repair costs up 5-12% due to labor and material inflation
- Utilities (when landlord-paid) up 8-15% in many regions
A Tampa landlord I work with saw his insurance premium jump from $2,400 to $4,100 annually—a 71% increase. His property taxes rose 12%. To maintain the same net income he needed to raise rent by at least $180/month. That is not greed, it is math.
3. Mortgage Rates and Homebuying Affordability
According to Freddie Mac data, 30-year mortgage rates went from under 3% in 2021 to over 7% in 2023 then settled around 6.5 to 7% through 2024.
The Census Bureau reports this created a "locked-in" effect, while changes to the cost of owning a home, such as higher interest rates or home values, could push households away from home ownership and toward renting, the share of households renting remained constant at 34.8% between 2022 and 2023.
What this means, would-be homebuyers stayed renters longer, increasing demand without increasing supply which results in more competition = higher rents.
I have watched this play out repeatedly. A Denver tenant who planned to buy in 2022 is still renting in 2024 because mortgage rates priced them out of market. That is one less vacant unit and one more person competing for rentals.
4. Rent Control Laws (Where They Exist)
Only a handful of states have statewide rent control:
- California: AB 1482 caps increases at 5% + CPI and maximum 10% annually
- Oregon: Limits to 7% + CPI annually
- New York: Varies by building age and program (rent stabilization vs. rent control)
Many cities have local ordinances:
- San Francisco: 3.6% maximum (2024)
- Los Angeles: 4% maximum (2024)
- Portland, OR: 10% maximum
- Washington, D.C.: CPI + 2%, maximum 10%
Research from the Cato Institute and other economists shows rent control often reduces housing supply by discouraging new construction and encouraging conversion to condos.
But for landlords operating in rent-controlled areas these are hard caps. You cannot exceed them regardless of your costs.
Through Hemlane, we automate rent control compliance. Our system checks local ordinances and flags lease renewals that would exceed legal limits. This has saved landlords from violations that carry fines of $1,000 to $10,000+ depending on jurisdiction.
5. Regional Economic Growth
Job growth drives rental demand. Simple as that.
Markets with strong job growth (Nashville, Raleigh, Austin pre-2023 and Boise) see rent increases outpace inflation. Markets losing jobs or population (many Rust Belt cities and San Francisco post-pandemic) see slower growth or declines.
BLS employment data by metro area correlates strongly with rent trends. When we analyze markets for Hemlane clients considering property investments, employment growth is the #2 factor we examine (after housing supply).
What the Data Shows About Tenant Behavior
Understanding how tenants respond to rent increases help landlords make smarter decisions.
The Turnover Cost Reality
According to Hemlane's internal data from 5,400 lease renewals:
Rent increases under 5%: Renewal rate 78% Rent increases 5-7%: Renewal rate 62% Rent increases 7-10%: Renewal rate 41% Rent increases over 10%: Renewal rate 18%
The cost of turnover averages $2,800-4,200 per unit when you factor in:
- Lost rent during vacancy (average 28 days at median rent)
- Cleaning and repairs ($400-800)
- Marketing and showing costs ($200-400)
- Screening and lease processing ($100-300)
- Administrative time (15-25 hours at opportunity cost)
Real-world math: A landlord raising rent from $1,500 to $1,650 (10% increase) generates $1,800 extra annually but if it causes turnover they lose $2,800 to $4,200 and netting -$1,000 to -$2,400.
Meanwhile, a 5% increase ($75/month = $900/year) with 78% retention risk generates expected value of $702/year with much lower turnover risk.
The Rent Burden Issue
The Census Bureau tracks that the share of renter income spent on rent and utilities remained at 31.0% in 2023 indicating that renter household incomes kept pace with rent hikes.
But averages hide pain points. The Joint Center for Housing Studies reports that 22.4 million renter households (49.7%) are cost-burdened paying more than 30% of income for housing.
What this means for landlords is understanding your tenant's income-to-rent ratio helps predict renewal likelihood. If they are already at 35% of income a 10% increase pushes them to 38.5% which is often unsustainable.
Through Hemlane's renewal analysis tools we calculate each tenant's likely rent burden after proposed increases helping landlords balance revenue goals with retention reality.
How to Actually Adjust Rent (Strategies That Work)
After analyzing thousands of renewals, here is what data shows actually works:
1. Research Your Specific Market
National averages are useless for your property. You need to know:
- What comparable units rent for TODAY (not last year)
- What vacancy rates look like in your submarket
- What new construction is coming online
- How your property compares (condition, amenities and location)
Use real data:
- Zillow Rent Index for city and neighborhood trends
- Rentometer for comparable rent analysis
- Craigslist, Apartments.com and Zillow for current listings
- HUD Fair Market Rents for baseline data
A Phoenix landlord I work with discovered his 2-bedroom was $150/month below market by checking 12 comparable units within half a mile. He raised rent $120 meeting the market but not exceeding it tenant renewed and he is now earning an extra $1,440/year.
2. Factor Your Actual Cost Increases
Calculate what your expenses actually went up:
- Property tax increase (check your assessment)
- Insurance premium change (check your renewal)
- Significant repairs you made (new HVAC, roof and appliances)
- Utility cost changes (if you pay them)
If your costs went up $100/month, you have legitimate justification for a rent increase covering those costs.
Document this. When tenants question increases showing "property taxes went up 8%, insurance went up 15% and I upgraded the HVAC system" demonstrates fairness.
3. Consider Tenant Quality and Tenure
Not all tenants are equal. Factor in:
- Payment history (always on time vs. frequently late)
- Property care (keep it immaculate vs. causing minor damage)
- Communication (responsive and reasonable vs. constant issues)
- Length of tenancy (3+ years vs. first lease)
Through Hemlane, we score tenants on these factors. Our data shows:
- Excellent tenants (top 20%): Keep increases under 3-4% to retain them
- Average tenants (middle 60%): Market-rate increases (4-6%) are fine
- Problem tenants (bottom 20%): Raise rent to market or above—if they leave, you win
A Seattle landlord had an exceptional tenant: five years, always on time, property in perfect condition. Market rents went up 8%, but he raised her rent just 3%. She renewed again, now in year seven. His tenant acquisition cost: $0 over 7 years. His competitive advantage: a reliable income stream while others constantly turn units.
4. Timing Matters Enormously
Data from Apartment List shows seasonal patterns:
Peak rental season (May to August): Highest demand, strongest pricing power Shoulder seasons (March to April, and September to October): Moderate demand. Off-season (November to February): Lowest demand, weakest pricing
If your lease renews in December and you push a 10% increase your tenant has terrible moving options. Winter moves are expensive and unpleasant. But they also know landlords struggle to fill units in winter.
Strategy: If possible, negotiate lease terms so renewals occur during peak season. A June renewal gives you maximum leverage; a January renewal provides the tenant with maximum leverage.
5. Communication Prevents Conflict
Here is what works:
- Give 60-90 days' notice (even if your state only requires 30)
- Explain the reasoning
- Offer something in return (longer lease term, included amenity, property upgrade)
- Be open to negotiation
Bad notice: "Your rent is increasing from $1,500 to $1,650 effective next month."
Good notice: "I wanted to give you early notice that when your lease renews in 90 days, I'll need to adjust rent to $1,625/month—a 8.3% increase. This reflects property tax increases of 7%, insurance premium increases of 12%, and the new HVAC system I installed last month. I value you as a tenant and wanted to discuss this early. Would you consider signing a 2-year lease at $1,600/month instead?"
The good notice does several things:
- Shows respect with early notice
- Justifies the increase with specific cost data
- Opens negotiation
- Offers an alternative (longer term at lower monthly rate)
Through Hemlane, we template these communications and track response rates. Professional, early, justified communications see 34% higher renewal rates than terse, last-minute notices.
State-Specific Rent Control and Notice Requirements
Some states regulate rent increases beyond federal Fair Housing laws:
California (Civil Code § 1947.12):
- AB 1482 caps increases at 5% + CPI, max 10% annually
- 30-day notice for increases under 10%
- 90-day notice for increases of 10% or more
- Applies to buildings 15+ years old
Oregon (ORS 90.600):
- 7% + CPI annual cap (statewide)
- 90-day written notice required
- Exemptions for buildings under 15 years old
New York:
- Rent-stabilized apartments: increases set by Rent Guidelines Board
- Rent-controlled apartments: even more restrictive
- Market-rate apartments: no increase limit, but 30-day notice required
Most other states: No caps on increases, but notice requirements vary (typically 30-60 days).
Check your specific state and local laws. Through Hemlane, we maintain a database of requirements for every major market and automatically calculate maximum legal increases based on property address.
What to Expect in 2025 and Beyond
Based on current trends and economic indicators:
Factors Supporting Continued Rent Growth
- Median rents for 2025 are expected to be 4.8% higher nationally than in 2024, according to HUD projections
- Housing shortage persists (estimated 1.5-4 million unit deficit)
- Mortgage rates likely to stay above 6%, keeping homeownership out of reach
- Population growth in Sun Belt states continues
Factors That Could Moderate Growth
- Record apartment construction in 2024-2025 increasing supply
- Potential recession could reduce demand
- Remote work allowing migration to cheaper markets
- Gen Z entering workforce with limited wage growth
Most likely scenario: Rent growth continues but moderates to 3-5% annually nationally, with massive regional variation (some markets +8-10%, others flat or declining).
The Bottom Line for Landlords and Tenants
After analyzing 5,400 lease renewals across 38 states, here's what the data actually shows:
For Landlords:
- National averages don't matter—your local market does
- Modest annual increases (3-5%) retain tenants better than sporadic large increases
- Turnover costs often exceed the benefit of aggressive rent increases
- Justifying increases with documented cost changes improves acceptance
- Excellent tenants are worth keeping even at below-market rates
For Tenants:
- Rent increases averaging 3-5% are normal in most markets
- Increases over 8-10% signal either market disruption or landlord overreach
- Long-term tenancy gives you negotiating leverage
- Comparing market rents gives you data for negotiations
- Sometimes moving makes financial sense, but factor in moving costs
Through Hemlane's lease renewal tools, we help landlords:
- Analyze local market comps automatically
- Calculate optimal increase percentages based on tenant quality
- Generate professional renewal notices with justifications
- Track tenant responses and streamline negotiations
- Ensure compliance with state/local rent control laws
The goal isn't to extract maximum rent regardless of consequences. It's to find the sweet spot where landlords earn fair returns while retaining quality tenants—because empty units earn $0/month, and tenant turnover destroys profitability.
About the Author: Daniel Kim has analyzed rental market trends and lease renewals since 2019, currently serving as Market Analytics Lead at Hemlane where he's studied over 5,400 lease renewals across 38 states. He holds a degree in Economics from University of Michigan and previously worked as a real estate market analyst at CoStar Group. He's not a financial advisor, and this article doesn't constitute financial advice.
About Hemlane: We provide property management software with market analysis tools that help landlords set competitive rents based on real local data. Our lease renewal system analyzes comparable properties, calculates optimal increase percentages, ensures compliance with state/local rent control laws, and automates tenant communications. Try Hemlane free for 14 days to see how data-driven rent decisions can maximize your income while minimizing turnover.
Essential Resources
Official Data Sources:
Market Research:
State Rent Control Laws:
- California: AB 1482 Full Text
- Oregon: Rent Control Statutes
- New York: Division of Housing and Community Renewal
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