Why agents must be prepared
A market under pressure: rising rents nationwide
Rental prices across the U.S. have continued to surge. The national average rent is expected to rise by 4.8 percent in 2025, with some regions experiencing hikes of 20 percent or more, according to data by Construction Coverage. For instance, states like Texas that have experienced significant population growth, particularly in major metropolitan areas like Austin, Dallas-Fort Worth, and Houston, which in turn increases demand for housing and pushes up rental prices. Midland, Texas, is anticipated to see a nearly 18 percent increase, elevating the median rent from $1,679 in 2024 to $1,977 in 2025, according to data from Apartment List. Similarly, Odessa is projected to experience a 13 percent rise, with median rents climbing from $1,550 to $1,754.
These substantial rent spikes are exacerbated by underbuilding during the 2010s and a surge in demand post-pandemic. The imbalance between supply and demand has intensified competition among renters, leading to rapid price escalations, particularly in these high-demand regions.
Los Angeles: A case study in market strain
On the other U.S. coast, states like California have also seen rental demand continuing to surge. The rental market in metros such as Los Angeles has been particularly intense, due to long-standing housing shortages and more recently compounded by natural disasters. The January 2025 Pacific Palisades and Eaton fires destroyed more than 15,000 structures, displacing over 150,000 residents and further straining the already limited rental supply, according to the California Department of Housing and Community Development.
As a result, rental prices in prime West Los Angeles areas, for example, are expected to remain high for at least the next 12 to 24 months, as demand outpaces supply. The average monthly rent in Santa Monica – the most sought-after coastal rental market – is now $3,361, nearly 50 percent higher than the Los Angeles County average of $2,160, according to data by Zillow.
Peak rental prices are driven by record-breaking interest in available units. With a flood of displaced Angelenos, competition for available units reached new extremes. According to RentSpree data, rental activity in Santa Monica, Beverly Hills, Manhattan Beach, and Malibu surged to six times their historic levels. Meanwhile, Sierra Madre, South Pasadena, La Canada Flintridge, and San Marino saw unexpected spikes in demand, with Sierra Madre alone experiencing a 400 percent increase in applications per property.
What this means for real estate professionals
With rental demand only expected to increase this year and beyond, real estate agents and property managers must adapt quickly to stay competitive. Understanding rental pricing trends, vacancy rates, and localized demand shifts will be critical in serving both tenants and property owners effectively. Those who leverage technology, data insights, and streamlined leasing processes will be best positioned to thrive in this increasingly competitive space.
Moreover, as homeownership affordability continues to decline, rental market expertise is no longer optional—it’s essential. By staying informed and proactive, real estate professionals can ensure they are not just reacting to market changes but leading the way in helping clients navigate one of the most competitive housing markets in history.
Michael Lucarelli is the CEO RentSpree
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.To contact the editor responsible for this piece: [email protected].
