What Happened to the Rental Crisis?
Oxford, Miss. – According to the latest Waller, Weeks, and Johnson Rental Index housed at American Real Estate Society, the national rental crisis shows signs of subsiding, with the average U.S. household now renting at a slight discount. The index reports that despite a 2.35% increase in average rent over the last year, a rate that is below historical averages, the monthly average actually declined by 0.06% in the last month.
This month's findings show the national average estimated rent to be $1,987, while the actual average rent is $1,978. This 0.44% discount, referred to as an "underpricing" or “discount” by the index producers, marks a shift from previous trends. The index suggests that households need to earn $79,144 or more annually to comfortably afford the average rental, calculated as no more than 30% of their annual income.
According to Dr. Bennie D. Waller with the University of Alabama, “Average household income is now slightly above the affordability figure of $79,144, making rents not only transacted at a discount, on average, but affordable as well to most.”
Dr. Shelton Weeks credits the stabilization to market dynamics. “Clearly, the pace of production of rental units around the country has been sufficient enough to flatten out rising rental rates,” he said. While acknowledging that "the crisis may have passed for now," he cautioned that "we should remain vigilant to market changes.”
Adding to the commentary, Dr. Ken Johnson highlighted the effectiveness of market forces. “Where we are now with rents in the U.S. provides clear evidence that markets work. Many were pushing for rent controls, which would have been a mistake.”
The index is a monthly publication that helps individuals and entities, including landlords, tenants, real estate professionals, developers and policymakers make informed rental decisions. It is developed using raw market data from third-party providers such as Zillow, Redfin, and Realtor.com.
This data is used to model long-term rental trends and compare them against current market observations. The percentage difference between the statistically modeled estimate and the actual rental price indicates whether a market is renting at a premium or discount. The data, which includes single-family homes, condos, and multifamily apartments is collected for the top 100 U.S. metropolitan statistical areas (MSAs). While the overall trend points toward stabilization, it is important to remember that rental market conditions can vary significantly by location.
*Crafted with assistance of Gemini AI and Waller, Weeks, and Johnson Rental Index end of September release. Vetted and Edited by Ken Johnson, Ph.D.
Contact: Ken Johnson, Ph.D.
Christie Kirkland Walker Chair of Real Estate
University of Mississippi
By
Ken Johnson, Ph.D.
Campus
Office, Department or Center
Published
October 20, 2025