The typical cost for rental housing in this economy right now? $1,965. That’s averaged across the entire pool of rental units nationwide.

That number is up by a modest 3.4% over the past year, according to a report out this week from Zillow. 

And while rents are rising in most parts of the country, there are three cities bucking the trend.

Denver, San Antonio and Austin were the only metro areas where rents fell last year. What’s so special about those places?

“In some sense, there’s nothing special about them,” said Anirban Basu, CEO of Sage Policy Group. He said in recent years, a number of cities in the South and West saw huge growth along with rising housing costs. Basu said apartment builders saw the demand and got to work.

“But even in a good market, the market can become saturated,” Basu said. “There can be overbuilding. And so when all of that capital flew into those markets to develop new properties, all of a sudden there weren’t enough tenants.”

Across the country, rents are still rising, but at a slower rate than before the pandemic. Denver, San Antonio and Austin just happen to be the cities where rent growth has gone negative, said Igor Popov, chief economist at Apartment List.

“ Rents are not falling in those places because they’re becoming less popular,” said Popov.

Popov said people moving there now have options, including a bunch of shiny, new apartment buildings.

“The projects that started back in the really high-rental-demand, low-interest-rate environment of a couple of years ago, those are finally hitting the market now,” said Popov. “And it’s a very different market than when they broke ground.”

For one thing, it’s more competitive for landlords. Emily Blair, executive vice president at the Austin Apartment Association, said some owners are offering concessions. 

“Maybe a floor plan upgrade or a couple months free,” said Blair.  ”So when you see a lot more supply, it does increase renters ability to have more choices in housing and increases their affordability options as well.”

And with more new units set to come online this year, Blair expects the concessions to continue.