Rents could fall as the number of completed apartments reaches its highest level in 50 years

According to Zillow, about 60,000 multifamily homes were completed nationwide in June, more than in any other month in the past 50 years. That’s forcing owners to make concessions ranging from parking privileges to weeks of rent-free rent. Zillow said the share of listings on its platform offering such concessions rose to more than 33 percent last month, up from 25 percent a year earlier.

“Builders have stepped up and built incredible numbers of homes in response to rising rents during the pandemic, and renters are now reaping the benefits,” said Skylar Olsen, chief economist at Zillow. “A softening job market and lower mortgage rates could mean falling rents if current trends continue.”

Housing construction has been one of the main factors contributing to post-pandemic inflation, and further improvement in rental supply should help lower benchmark interest rates and strengthen the Federal Reserve’s case for lower interest rates. Nationwide housing inflation fell to 5.4% in June from a peak of over 8% last year.

In some major metropolitan areas—particularly cities in the South and West, including Atlanta, Phoenix and Austin—more than half of the rental listings on Zillow offer a discount.

The number of multifamily homes under construction hit a record high last year. While it has declined since then, June’s number was still higher than at any time since the early 1970s.