Average Rent Increase Per Year (2026 Update)

The US rental market has changed dramatically over the last few years. After wild post-pandemic spikes, we're seeing things settle into a more predictable rhythm in 2026. Recent rent spikes in 2021-2022 saw increases of 17% to 18% due to market demand post-pandemic.

While rent growth has slowed, your expenses keep climbing—especially insurance and property taxes. Landlords face rising costs across the board. The question isn't just "how much rent should I charge?" but "how do I set a fair price without losing great tenants?"

Understanding the average rent increase per year and making smart pricing decisions for your rental property are essential starting points.

TL;DR

The rental market in 2026 is stabilizing with national rent prices projected to increase by approximately 2% to 3% annually, depending on the region and property type. While landlords face rising insurance premiums and operating expenses, retaining quality tenants remains a priority. This guide covers how to calculate reasonable increases, navigate rental caps, and communicate changes effectively to maintain a positive landlord-tenant relationship.

Understanding the Average Rent Increase Per Year in 2026

The national average rent reached about $1,302 in 2024—a 31% jump over five years. The good news? Those dramatic increases are slowing down. For 2026, experts project increases between 2% and 3% nationally—this represents the national average rent increase many can expect.

Single-family homes are seeing stronger demand, with estimated rent growth closer to 3.2% in 2025. Single-family properties typically see steadier increases than apartments. Apartments face stiffer competition from new construction, so the average rent for apartments is growing more slowly due to rent inflation pressures being offset by supply.

While national averages provide helpful context, understanding the average rent in your specific neighborhood and evaluating local market conditions matters most when setting your new rent price. National averages alone don't tell you what to charge locally.

Key Factors Driving Rent Increases in the Current Market

Let's talk about why you might need to increase rent in 2026. This strategy is not always about maximizing profits—but also to meet the growing costs that are inevitably going to rise.

So, what costs are those, exactly? Insurance is a big one. Landlord insurance costs have jumped by roughly 5.3% recently. This means that property taxes have also increased as local governments reassessed property values during rising costs. Plus, maintenance costs keep rising with inflation pressures and increased demand for services. Rising property taxes, insurance premiums, and maintenance expenses can lead landlords to increase rents to maintain profitability.

What to Consider With Cash Flow

When you review your financial books, your actual cash flow may be tighter than expected. Local economic conditions, such as job growth and employment rates, can impact rental demand and rental prices. These rising rent prices across the market reflect the cumulative impact of cost pressures and rental inflation, and many rent price-based decisions come down to covering these essential operating expenses.

Regional Trends: How Rental Prices Vary by State and City

National averages only tell you so much. Rental prices vary wildly by location, and market shifts can differ dramatically between regions. Here are some examples showing how market trends play out:

• Austin, Texas: Rents dropped by about 6.6% due to market oversaturation.
• Denver, Colorado: Saw a 4.8% decline as supply caught up with demand. The average rent in Denver has pulled back from its pandemic peak.
• Miami, Florida: A decline of -2.7%.
• Cleveland, Ohio: Rents in Cleveland saw a YoY increase of 2.20%.
• Buffalo, New York: Rental prices in Buffalo grew at an even higher rate than in Cleveland, at 3.30%.
• Baltimore, Maryland: Baltimore also experienced a steady growth of 2.40% in rent prices.

Late 2024 to 2025 is projected to show a growth slowdown to around 2% to 3% as inventory increases. Prime locations with desirable amenities and job markets command higher rents.

Understanding local rent trends and local market conditions matters more than national statistics. This means that landlords need to watch these regional market trends closely.

The Impact of Housing Demand and Supply on Rates

Supply and demand is playing out in real-time in the US rental market. Over 600,000 new apartments were completed in late 2024 and throughout 2025, especially in Sun Belt states. When housing supply outpaces demand, you lose pricing power. High demand and low supply drive rent prices up in competitive markets.

But demand remains strong. Mortgage rates keep homeownership out of reach for many, sustaining demand and preventing rents from tanking. Higher demand for rental apartments typically leads to more significant rent increases.

In neighborhoods with slower construction, low supply continues pushing prices upward. If your property is in an area with good schools or public transit, you might still have strong market demand. The availability of rental properties affects rent prices, as fewer available units can lead to higher rents.

When Can a Landlord Raise Rent Legally?

You can't decide to increase rent on a whim—there are rules. Here's when you can legally adjust rent and how much does rent increase depend on your lease terms:

• When a fixed-term lease expires: Your main opportunity to propose a new rent price. For fixed-term leases, landlords generally cannot raise rent until the lease expires, unless the lease agreement allows it or the tenant agrees to the change through a lease agreement modification.
• For month-to-month leases: You can typically raise rent with proper written notice, usually 30 days but sometimes 60. For month-to-month leases, most states require at least 30 days' written notice before a rent increase takes effect. Month to month leases offer more flexibility for property owners than fixed-term agreements.
• When a unit becomes vacant: You're generally free to reset rent to current market rates, barring regulatory restrictions. Landlords can raise rent when renewing a lease, transitioning to a month-to-month agreement, or listing a unit for a new tenant.

During a fixed-term lease, the price stays locked until the lease agreement expires. Review market conditions before the lease agreement ends to determine appropriate rent adjustments.

Navigating Rent Control Laws and Local Regulations

Before you raise rent, know whether pricing regulations apply to your property. Some states, such as California, have strict rent control laws in place which affect how much a landlord is able to raise rent prices each year. While this is not as common nation-wide, it's important to understand your local jurisdiction to ensure you are compliant and fair.

For most rent control cities, these rental caps typically limit annual increases that landlords can make, which are usually tied to the Consumer Price Index (CPI). Here are some examples of rent control caps currently in place:

• Oregon: Caps annual rent increases at 9.5%
• California: Has a statewide limit of 5% plus CPI annually
• New York: Caps raises at 2% plus CPI

Some states have rent increase limitations, particularly for tenants receiving housing assistance or Section 8 vouchers. To ensure you comply with local laws, always verify specific rental caps before drafting a notice.

Landlords should review local landlord-tenant laws before making any rent adjustments, as some states and cities have rent control regulations that may impose further restrictions. The amount of rent that can be raised each year will depend on local landlord-tenant laws and rent control regulations. Consulting with local landlord-tenant laws ensures you implement rent increases legally and helps you understand how much rent increases are permissible.

How to Calculate a Reasonable Rent Increase

Figuring out a reasonable rent increase requires a systematic approach. Knowing how much rent to set starts with understanding both your costs and market rates. Here's how:

1. Check the Consumer Price Index (CPI) to understand inflation and how purchasing power is changing.
2. Review your operating expenses line by line. See how insurance, taxes, and maintenance costs increased. Figure out what you need to maintain your target return on investment.
3. Apply a standard percentage range. A typical rent increase for renewals usually falls between 3% and 5%. For new leases, 5% to 15%, depending on market conditions.
4. Consider a rentability report, which is offered by certain property management software, such as TenantCloud. This report provides a snapshot with comparisons of other rent charges in your area, so you know what to expect annually.

Landlords typically offer lower increases for renewals (0% to 5%) than for new leases (5% to 15%). But remember: keeping a good tenant is worth more than maximizing every dollar. At the same time, you should also balance your revenue needs against vacancy risk.

Property improvements like updated appliances can justify a larger annual rent increase—and this increase per year should feel fair and defensible. A reasonable rent increase is typically one that aligns with the average rent increase per year in the region and reflects changes in property expenses and market value. Understanding how much rent to charge requires analyzing both your costs and local market data.

Using Rental Comps to Determine the Right Price

Reality-check your calculations against what's happening in your market. This is where comparable properties become essential.

Rental comps are similar properties in your neighborhood showing fair market rent. Focus on units matching yours in square footage, bedrooms, and amenities. Landlords should research local rental comps to justify their rent increases. Analyzing how much rent comparable units command helps you set competitive pricing.

Pro tip: Listed prices online aren't always what landlords actually rent properties for. Rent concession deals or negotiations can lower the final number significantly. Property management software provides actual leased data, which is more accurate than public listings. Comparing rental comps gives you the data needed to set the right rent price for your rental property.

Balancing Profitability With Tenant Retention Strategies

Let's talk about something that doesn't show up in spreadsheets: the value of a great tenant. Losing a reliable tenant can cost more than a modest increase in gains.

One month of vacancy costs roughly 8.3% of your annual revenue, instantly wiping out gains from a 5% rent increase. Landlords should consider the timing of rent increases to avoid tenant turnover—implementing increases mid-lease or without proper notice can backfire. If you have a tenant who pays on time and cares for your rental property, offering a smaller increase to keep them may be smarter.

You can offer incentives like property improvements or upgrades. In softer markets, consider a rent concession to keep a great tenant. Landlords should consider the impact of rent hikes on tenant turnover, as excessive increases can drive tenants to seek more affordable options. The goal is to remain competitive and keep your property occupied. Strong retention strategies help maintain steady rent collection and reduce vacancy costs.

Rent Adjustments During Lease Renewal vs. New Tenants

Your strategy differs for renewals versus new tenants, and understanding how much rent increases should vary based on tenant status is critical:

1. For renewals: Keep pace with inflation and cover costs while retaining the tenant. These increases are typically modest—3% to 5% for existing tenants. Maintain your landlord-tenant relationship while staying financially healthy. The annual rent increase for existing tenants should feel reasonable and support a positive relationship between landlords and tenants.
2. For new tenants: Reset the price to the current market value. If a long-term tenant's rent has stayed flat for years, their current rent might be significantly below market. When that unit turns over, establish a new rent price reflecting today's fair market rent, capturing the full appreciation of your rental property. This is when landlords can align pricing with current market conditions.

How Property Managers Can Communicate Increases Effectively

How you communicate rent increases is often as important as the amount itself. Property managers who handle this well maintain better relationships and see less pushback.

When sending a notice, don't just state numbers. Briefly explain what's driving the change. Landlords should communicate with tenants about the reasons for rent increases to foster trust. Providing clear reasons for rent increases can help tenants accept the changes more readily. To effectively communicate rent increases, focus on transparency and empathy.

Timing matters. Don't send a notice at the last minute. Landlords should start discussions about rent increases early, ideally 60 to 90 days before lease expiration, giving tenants real time to process and decide. Effective communication of rent increases is important for maintaining a positive landlord-tenant relationship.

Legal Requirements for Rent Increase Notices

Let's get into the legal requirements—mistakes here can cost you. Many states require landlords to provide a notice outlining the new rental rate and when it takes effect.

Most states require at least 30 days of written notice for a rent increase. For month-to-month leases, most states require at least 30 days' written notice before a rent increase takes effect. Some states and cities require 60 or 90 days' notice, especially for significant increases or long-term tenants. Most states require landlords to provide this notice within a specific timeframe—typically 30 or 60 days before the lease ends or the increase takes effect.

Your notice must include:

• The tenant's name and property address
• The current rent and new rent amount clearly stated
• The date when the new rent price takes effect

Landlords must provide a formal Rent Increase Notice to their tenants when planning to increase rent, which is essential for transparency and compliance with local laws.

Missing details can lead to disputes. Always consult local landlord-tenant laws to ensure your templates meet all local regulations. Verify these requirements with local landlord tenant laws before taking action. In states without rent control, landlords typically have more leeway in setting rent increases, but must still provide reasonable notice and avoid discriminatory practices.

The Role of Financial Tracking in Justifying Increases

Your secret weapon for justifying rent increases: solid data. Accurate financial records show exactly how costs squeeze your margins.

Pull up your Profit and Loss statements and look at spiked line items. Maybe insurance jumped 8% or maintenance costs are up 12%. These are concrete reasons to increase rent. Tracking rent increases and decreases across regions is important for making informed real estate decisions for property owners.

Check your rent roll to see portfolio performance—this shows you the average rent you're collecting and helps identify underperforming properties. Using software to track rent collection and expenses ensures decisions are based on real numbers. Consider landlord software fees when calculating total operating expenses—another factor in determining necessary rent adjustments. Landlords who maintain detailed records can better justify their pricing decisions.

Future Outlook: Projecting Rent Trends Through 2026 and Beyond

The rental market should continue stabilizing through 2026 and beyond. Single-family rents are projected to outperform apartments. The average rent for single-family homes should grow faster than multifamily units. Single-family home rents are predicted to rise more sharply at 3.2% in 2025 compared to multifamily rents (2.08%).

For apartments, new supply will take time to absorb, keeping multifamily rent growth in the 2% to 4% range. Understanding these market conditions and rent trends helps property owners and landlords remain competitive.

Housing shortages remain a structural US problem. While current supply moderates prices temporarily, the underlying lack of affordable housing and high homeownership barriers mean rental demand should stay strong for years.

Finding the Right Balance

Finding the right rent increase for 2026 requires balancing good data, legal compliance, and genuine empathy. Yes, rising ownership costs make increases necessary. But the stabilizing market means you need to be strategic to avoid costly vacancies.

By using rental comps, understanding regional rent trends, and communicating transparently with your tenants, you can navigate these changes successfully. Knowing what to charge and when to adjust rent are fundamental skills for successful property management.

The good news? TenantCloud's all-in-one platform can help you simplify and grow your property management firm. Take advantage of automated market reports, financial tracking, streamlined communication channels, tenant screening, rent collection, and other integrated features via a cost-effective and user-friendly service that is designed to scale with your business.

Sign up to TenantCloud today to streamline your property management and make smarter rental pricing decisions!

FAQ

How much can a landlord raise rent in 2026?

In areas without rental caps, there's generally no federal limit. In jurisdictions with rent control, increases are capped by state law—usually 5% to 10% plus inflation. The average rent increase typically falls between 2% and 5% for existing tenants. Always check local regulations.

How much notice must a landlord provide before increasing rent?

Most states require at least 30 days of written notice. Some require 60 or 90 days, especially for significant increases. Landlords should provide a Rent Increase Notice to inform tenants.

Can I negotiate a rent increase with my landlord?

Yes. Tenants often wish to negotiate rent increases, especially when renewing their lease. If you have a strong payment history and similar properties rent for less, landlords may lower the increase to avoid vacancy costs.

Does rent control apply to all properties?

No. It typically applies to older multifamily buildings in specific cities, while newer construction and single-family homes are often exempt. Check your local rent control ordinances.

What is the average rent increase for lease renewals?

Typically 3% to 5%. Landlords typically offer lower increases for renewals (0% to 5%) than for new leases (5% to 15%) to maintain tenant retention.