Metro Phoenix Rental Market Now Renter-Friendly As Vacancy Rate Climbs To 8.4%
METRO PHOENIX RENTAL MARKET NOW RENTER-FRIENDLY AS VACANCY RATE CLIMBS TO 8.4%
PHOENIX ARIZONA REAL ESTATE
Metro Phoenix Rental Market Now Renter-Friendly As Vacancy Rate Climbs To 8.4%
By AZBigMedia, azbigmedia.com | February 20, 2026
The U.S. rental market has officially tipped in favor of tenants. According to the Realtor.com® January Rental Report, the average rental vacancy rate across the nation’s 50 largest metros climbed to 7.6% in 2025, a notable improvement from 7.2% in 2024. The Metro Phoenix rental market says its vacancy rate climb to 8.4% in 2025, a jump from 7.9% in 2024.
This surge in availability has transformed the market landscape: 44 out of the 50 largest metros are now either renter-friendly or balanced, leaving just six markets where landlords still hold the upper hand.
As vacancy rates rise, costs are following suit and adjusting downward. January marked the 29th consecutive month of year-over-year rent declines, with the national median asking rent dipping 1.5% year-over-year to $1,672.
“After years of being squeezed by limited inventory, renters are finally seeing the supply wave work in their favor,” said Danielle Hale, chief economist at Realtor.com®. “This shift doesn’t just mean lower prices; it means that renters today have more options and more bargaining power. While the market isn’t uniform everywhere, the broader trend is a move toward a much needed equilibrium that allows for more flexibility and choice in the housing search.”
The Great Market Flip: Milwaukee and Beyond
The most striking example of this shift is Milwaukee, Wis, which recorded the nation’s most dramatic transformation. Once a tight-supply market, Milwaukee’s vacancy rate more than doubled — climbing from 4.9% in 2024 to 10.8% in 2025.
Across the top 50 metros, the breakdown of market power has shifted dramatically:
22 Renter-Friendly Markets: Vacancy rates above 7% give tenants the upper hand (e.g., Birmingham, Austin, Milwaukee).
22 Balanced Markets: Vacancy rates between 5% and 7% offer a stable environment for both parties.
6 Landlord-Friendly Markets: Only six markets remain tight enough for landlords to “call the shots,” including Boston and New York.
The Markets Bucking the National Trend
While the national trend is overwhelmingly positive for tenants, the report identified renter setbacks in a few specific markets. Relatively affordable, job-rich areas like Pittsburgh, Pa. and Richmond, Va. shifted away from renter-friendly conditions into the balanced category. This move was fueled by a surge in out-of-market demand as renters from more expensive cities migrated toward these hubs, tightening the local supply.
“We are seeing a fascinating tug-of-war,” said Jiayi Xu, economist at Realtor.com®. “In the Sun Belt and parts of the Midwest, new construction is helping to create negotiating room for renters. But in traditionally more affordable areas like Richmond and Pittsburgh, the secret is out, rising demand from out-of-towners is starting to soak up that excess vacancy, proving that renter-friendliness can be fleeting if supply doesn’t keep pace with demand.”
A small handful of coastal hubs remain the exception to the renter-friendly trend. In metros like Boston, Mass. (3.2%), San Jose, Calif. (3.5%), and New York, N.Y. (4.6%), vacancy rates remain stuck below the 5% mark. In these supply-constrained areas, landlords still hold the upper hand, and the lack of available units has even pushed rents upward year-over-year in San Jose (+1.9%) and New York (+0.8%), bucking the national decline.
National Rent Trends by Unit Size
While vacancy rates provide the leverage, the price data confirms the downward pressure. All unit sizes saw annual declines in January, with 2-bedroom units seeing the steepest drop.
