Rents in Los Angeles reached their lowest level in three years, but most residents still can’t afford them
Rents in Los Angeles County are starting to fall after years of steep increases.
The average asking rent for all rental properties in LA County fell to $2,520 in the first quarter of 2026, down $97 (or 3.7%) from the same period a year earlier, according to the first Los Angeles Rental Report from Realtor.com economists.
This is the lowest level since early 2022 and reflects a broader cooling trend that has developed following the post-pandemic rise in housing costs.
The decline is even more pronounced when compared to the market’s peak.
Since peaking in the summer of 2022, rents have fallen $298, or 10.6%, indicating an ongoing correction rather than a short-term fluctuation.
“Since then, a surge in new multifamily construction has put continued downward pressure on rents,” says economist Realtor.com Jiayi Xu.
The largest declines affected smaller rental properties
Smaller units, especially those with zero to two bedrooms, have seen the biggest price drops.
The average rent for these units fell to $2,241, representing a year-over-year decline of $135, or 5.7%. In contrast, larger units with three or more bedrooms saw a more modest decline of $103, or 2.8%, bringing the average rent to $3,585.
“This trend can be partially explained by the sharp increase in the number of ADUs in Los Angeles County between 2022 and 2024,” says Xu. “As permitted units complete construction – typically taking 6 to 18 months from permit to occupancy – a growing wave of new small rental units has entered the market, increasing downward price pressure concentrated in the smaller unit segment.”
Although tenants in Los Angeles are gaining influence, rents are still high.
“Supply has finally caught up, giving tenants more options and more bargaining power than they have had in years,” says Danielle Halechief economist at Realtor.com.
“But falling rents don’t automatically mean affordable rents. A typical rental home in Los Angeles still requires an annual household income of more than $107,000, and for many families in this city, that bar simply remains out of reach.”
Divergent trends in cities
Despite the overall downward trend, rent changes vary significantly across different cities in the province.
Luxury markets have seen a notable decline, with rents in Beverly Hills down 9.3%, Malibu down 3.6% and Santa Monica down 2.6%.
“Even these premium markets were not immune to the broader weakening trend in the first quarter of 2026,” says Xu.
Meanwhile, more transit-oriented and walkable cities have shown resilience or even modest growth.
Pasadena led with a 5.8% rent increase, followed by Long Beach with 2.4% and Culver City with a slight increase of 0.2%.
These areas are “all well connected by metro and anchored by major employers,” says Xu.
Policy changes shape the rental landscape
The city of Los Angeles recently revised its rent stabilization ordinance, capping annual rent increases at 4% for approximately 650,000 units – approximately 74% of rental stock.
The policy, which goes into effect in July 2026, is expected to provide significant long-term savings for tenants who already have rent-stabilized units.
However, it could also reinforce a growing ‘lock-in’ effect, with tenants becoming increasingly reluctant to move. As Xu notes, 86.5% of renters in the city of Los Angeles already stay in the same unit year after year.
This reluctance is largely caused by an ever-widening affordability gap. In 2024, the average contract rent – which reflects what tenants actually pay, often under rent stabilization – was $1,804, more than $1,000 below the current average asking rent on the open market. “With the gap between staying and switching already exceeding $1,000 per month, that lock-in will only increase,” Xu explains.
The result is a tightening of available inventory as fewer tenants list units below market price. According to Xu, this lower turnover is likely to intensify competition for the limited number of apartments that become available, raising rents in the broader market and increasing the likelihood of bidding wars between potential tenants.
