Rents are finally falling in 2 of America's most expensive cities

Rents are falling, but only for two of the most expensive markets in the US.

New York City and San Francisco are finally seeing a decline in the cost of rent according to housing provider Equity Residential. The firm lowered its guidance for its revenue growth due to the softening in the two markets. The increase in revenue is projected to be 4.0% to 4.5% for 2016, down from the original estimation of 4.5% to 5.0%.

"The revision is being driven by continued weakness in its New York portfolio and recent underperformance in the company's San Francisco portfolio," said a release from Equity Residential.

"While occupancies and renewal rates in these markets continue to perform in line with the company's expectations, new lease rates are not meeting original projections due to new rental apartment supply."

While the rest of the country is running significantly short on housing supply, Equity Residential is seeing too many apartments in two cities that have been a huge focus of the housing market in the past few years.

The massive amount of building in these metro areas was also pointed out by Michelle Meyer, an economist at Bank of America Merrill Lynch, in a recent note.

"In particular, the New York and San Francisco metro areas, which tend to have a higher concentration of luxury buildings, made up 11% of apartment construction since 2010," wrote Meyer. "To put this into perspective, from 1995- 2005, these two metro areas made up 7% of apartment construction."

The dramatic increase in the supply of housing seems to have hit a tipping point as Meyer estimated that the average rent for both of these markets is going to slide slightly over the next year.

Following the announcement by Equity, their stock is trading down just over 4.3% for the day at $66.21 a share.