The ‘Affordability Trap’: Why Moving to a Cheap City Makes Tenants More Expensive

While early 2026 brought low monthly housing costs and high vacancy rates in many major metros, renters in several low-cost, job-filled areas are seeing the stark contrast.

What makes a change? Researchers at Realtor.com® say the main reason is the influx of renters from expensive cities, due to lower costs. As these newcomers take up available units, they inadvertently drive up prices and make those budget-friendly markets more affordable for everyone.

Nationally, January marked the 29th consecutive month of annual rent declines for apartments ranging from studios to two-bedrooms, with median rents down 1.5% year-over-year, according to the latest monthly rent report from Realtor.com.

The median rent across America’s 50 largest metros came in at $1,672 last month, down $85 from its August 2022 peak.

Of that group, 22 markets ended the year as rent-ready, another 22 were rated, and only six were owner-friendly.

A rental vacancy rate of 5% to 7% indicates a balanced market where supply and demand are closely aligned.

Vacancy rates below 5% are usually a sign of a strong landlord market, while rates above 7% tend to shift to renters.

When employers no longer have the upper hand

Seven municipalities stood out from being buyer-friendly to balanced last year, led by Richmond, VA, where the vacancy rate dropped from 8.2% in 2024 to 5.2% in 2025. Meanwhile, the median asking rent jumped 1.9% year over year, to $1,509 in January.

Located near Washington, DC, Richmond has many thriving employment sectors, supported by health care systems; financial services, led by Capital One; manufacturing companies; federal, state and local government agencies; and higher education institutions.

And it’s more affordable than the country’s capital.

The median rent in DC was $2,253 last month, up 0.4% from a year ago, as the metro’s vacancy rate rose from 4.7% to 6.3%, transforming it from a homeowner-friendly to a limited rental market.

Perhaps it’s no surprise that Richmond has emerged as one of the top destinations for college graduates looking for affordable living and good career growth opportunities.

Pittsburgh went through a similar transition as Richmond, from a rental-friendly neighborhood to a moderate market as its vacancy rate dropped from 8.7% to 6.9% over a 12-month period.

However, the median asking rent in Pittsburgh saw moderate growth compared to Richmond, which rose 0.9% to $1,427 in January.

The Steel City has become a hub for students, recent graduates, and young professionals seeking well-paying jobs, affordability, and a high quality of life enriched by a vibrant art scene and numerous professional sports teams.

The northeastern city is home to several large employers, including universities, health care services, government offices, and large private companies such as PNC and Kraft Heinz.

According to an analysis of the most recent rental data available through the end of 2025, Richmond had one of the highest shares of out-of-town rental demand in the country, exceeding 60%, meaning that nearly two-thirds of all renters in the city were from out-of-towners.

Demand outside of the Pittsburgh market has slowed slightly, but is still registered at 55% in the fourth quarter of 2025.

Ironically, both metros draw most of their internet traffic from Washington, DC.

“The consistency of multifamily supply is a key factor in determining whether markets like Pittsburgh and Richmond can meet long-term demand,” said a Realtor.com economist. Jiayi Xu. “Our previous research indicates that several of these markets may have been successful in obtaining multi-family and building permits. Meanwhile, the recent drop in rental vacancy rates is also a testament to this market’s strength.”

Some markets have shifted to lower rent levels

Five other metros moved from rent-friendly to balanced last year, including Columbus, OH, where the vacancy rate fell from 7.3% to 5.7%, and the median rent increased 0.3%, to $1,187.

In Columbus, more than half of Internet traffic came from out-of-market tenants, with high-cost DC also a major source of outbound demand.

Las Vegas saw its vacancy rate drop from 8.3% to 6.4%, but the median asking rent also fell, falling 2% year over year to $1,429.

“That points to an active but competitive market,” Tania Jhayemreal estate agent at Keller Williams Luxury Marketplace in Las Vegas, tells Realtor.com. “Units are being snapped up and vacancies are tightening, which tells us that the demand is there. At the same time, landlords are still pricing in an orderly manner and in some cases, are giving permission to keep the properties rented.”

According to the agent, the decrease in asking rent suggests that owners are focusing on maintaining occupancy rather than driving rent growth.

America’s gambling capital stood out for having the highest share of outbound traffic last year, at 62%, with high-end Los Angeles a prominent source.

Jhayem confirms that Nevada metro has seen a continued need to hire from people from other parts of the US due to work, lifestyle changes, and overall cost of living considerations.

“Most of these households choose to rent first before deciding to buy,” said Jhayem. “That rent-before-buy pattern has been consistent and is helping to absorb available units, especially in new apartment communities and product in the suburbs.”

The median rent in Louisville, KY, fell by more than Vegas, down 2.8% year-over-year, to $1,219 in January, as the vacancy rate fell from 7.2% to 6.7%.

Atlanta was once again an affordable market for renters, with asking rent falling 1.6% to $1,544. However, the vacancy rate dropped from 9.3% to 7%, giving prospective employers fewer options and less bargaining power.

In Indianapolis, IN, only 6.6% of rental properties within the metro area were vacant last year, down from 9.1% in 2024 as rents remained flat.