Concessions Fade as US Spring Rental Season Kicks Into High Gear

With spring finally here, the share of rental listings offering tenants concessions such as free months of rent or free parking many have peaked, Zillow recently reported (3-20-24). The change comes after a winter season when nearly a third of listings offered concessions. However, Zillow points out that the market is still friendlier for renters than it was a year ago.

February data show 32.2% of rental listings on Zillow offered a concession, down slightly from December but up 5.6 percentage points from February 2023. That marks the slowest annual growth rate since June 2023. After seven months of consecutive monthly increases to end 2023, the share of rentals offering concessions fell to 31.9% in January, before a slight uptick in February. If past seasonal trends continue to hold, renters looking to secure a new lease in the spring or summer may encounter fewer incentives and increased competition.

While the expected seasonal shift accounts for the stabilization of concessions, the pace of rent growth and vacancy levels offer deeper insights, Zillow said. Recently, rents haven’t been going up as quickly as they did before the pandemic, and it looks like supply and demand are starting to balance out. The share of rental housing units that were vacant was at 6.6% in 2023Q4, just a bit higher than the nearly forty-year low seen at the end of 2021. This indicates there are enough eager renters, nudging the market toward stability.

Commenting on the report, Anushna Prakash, an economic research data scientist at Zillow, said:

“The rental market always ebbs and flows with the seasons, so it’s no shock that we’re seeing concessions start to level off as we move into the warmer months. It looks like we’re beginning to see the market balance the ongoing high demand from renters with a competitive environment for property managers and landlords. While concessions are beginning to dip, they are more common than they were a year ago, helped by new buildings that have opened their doors.”