Rents are falling in some hotspot cities due to a ‘timing mistake’ by homebuilders

Rents have moved in opposite directions across major US cities since mid-2023, and changes in where Americans are moving and how much those cities built in response could explain why.

Cities like New York and Chicago have seen their rents rise, while others, like Austin, have seen them fall by around 8%, according to a study by Aziz Sunderji, founder of Home Economics, a publication about the US housing market.

Sunderji found that increases in supply in expensive markets with decreased inflows of new residents pushed rents down, while the local labor market, as measured by remote work and tech, had the least impact. That drop in rents could…

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