Rents across Southern California are expected to rise through 2029, with Los Angeles and Orange counties continuing to face an apartment shortage, according to a University of Southern California forecast released Tuesday. The USC Lusk Center for Real Estate’s Casden Real Estate Economics Forecast projects annual rent growth of 1.4 percent in Los Angeles County and 1.9 percent in Orange County during the next three years.
Los Angeles County’s average rent was $2,362 in June, and the report projects it will reach $2,469 by June 2029. The county’s vacancy rate was 5.6 percent in June and is forecast to fall to 4.87 percent as available units are absorbed. Apartment permits in Los Angeles County ran 60 percent above the previous year’s monthly average during the first half of 2026 following post-wildfire permitting reforms. But the report said it was unclear how many projects would ultimately be built because of labor, material and financing costs.
Orange County’s average rent was $2,792 in June, the highest among the five markets studied, and is projected to rise to $2,946 by June 2029. Annual new housing deliveries are forecast to decline 40 percent over the next three years, the report says.
Los Angeles, Orange and Ventura counties remain chronically undersupplied, the report found.
“Housing cannot be affordable unless we have plenty of it,” said forecast author Moussa Diop, an associate professor of real estate at the USC Sol Price School of Public Policy.
The report pointed to San Diego County and the Inland Empire as examples of how increased apartment construction can ease housing pressures over time. San Diego County added about 16,000 apartments since late 2023, roughly twice the new supply added in Orange County. According to the forecast, average San Diego County rents are now about 7 percent below those in Orange County.
San Diego County’s average rent was $2,592 in June and is projected to grow an average of 1.5 percent annually through 2029. The Inland Empire added 12,300 rental units over the past three years, expanding its apartment stock by about 7 percent, the fastest rate among the five markets. Its average rent of $2,150 remained the lowest in the region, according to the forecast, although rents are projected to grow an average of 2.4 percent annually through 2029.
“San Diego and the Inland Empire show that there is still hope for affordability, but meaningful gains take time and sustained development,” Diop said.
The forecast cited persistent inflation, elevated interest rates and high construction costs as obstacles to housing development. It also noted that California’s housing stock grew at less than half the rate of Texas, Florida and Arizona between 2015 and 2025. “Southern California’s housing shortage is a problem we created, but it is also a problem we can solve,” Diop said.
