Renters are breathing easier with income growth outpacing rent hikes, putting an extra $193 back in the typical household's pocket each month. That's $2,318 more a year for groceries and gas — or a head start on a down payment.

According to the Zillow® March Rental Report, the typical asking rent rose just 1.8% year over year to $1,910, the slowest annual pace since 2020. Single-family rents climbed 2.5% year over year to $2,225, the slowest annual growth ever recorded in Zillow's data series, while multifamily rents rose 1.3% to $1,757.

Across both segments, rent growth is running below income growth, easing the financial pressure renters have faced since the pandemic-era surge.

"For the first time in years, income growth is outpacing rent increases. The typical household has an extra $2,318 a year, enough to cover months of groceries, a full year of phone and internet bills, or make meaningful progress on savings," said Zillow Senior Economist Kara Ng. "This moment of relief doesn't erase the affordability challenges that built up over time, but it does give renters more flexibility than they've had in years."

The savings are being felt across the country, though the amount varies by market. Renters in Austin are seeing the biggest annual gains, with roughly $3,182 more compared to a year ago after factoring in income growth and rent declines. Tampa renters are close behind at $3,110 annually, followed by Denver at $3,002.

Even in higher-cost markets, renters are coming out ahead: Los Angeles renters have about $2,438 more per year in their pockets. In San Francisco, where rents have risen sharply, the gain is more modest at $458 annually.

Affordability is beginning to recover and move closer to historical norms. The share of income the median household spends on typical rent has eased to 26.5%, down slightly from a year ago and nearing the pre-pandemic level of 25.8%. Still, a household needs to earn roughly $76,400 a year to comfortably afford the typical rental, 35% more than what was required before the pandemic.

At the same time, affordability challenges in the for-sale market are pushing some would-be first-time buyers to consider rentals. New Zillow research shows nearly 1 in 13 for-sale shoppers are also browsing rentals, and for the homes these dual shoppers are considering, owning costs about $415 more per month than renting. For households weighing their options, renting often offers the more affordable and flexible path.

Two in 5 rental listings on Zillow offered concessions in March — things such as free rent or waived fees — tying 2025 for the highest share ever recorded for the month. With incomes rising and more supply in the market than renters have seen in years, they have more options and more power at the negotiating table.

Zillow connects renters to apartments, single-family homes and rooms for rent all in one place. With Zillow's AI mode, renters can search smarter, get instant answers about listings and find a home that fits their needs and wallets faster than ever. The Zillow rent affordability calculator helps ensure the match fits the budget.