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National Multifamily Market Report – January 2025

Cover image for the January 2025 National Multifamily Market Report
Image by Davel5957/iStockphoto.com

Rents spark growth at the start of 2025, up 0.8% year-over-year, according to Yardi Matrix’s latest national multifamily market report.

Report highlights:

  • National advertised asking rents gained $3 to $1,746 in January, up 0.8% year-over-year.
  • Rent growth inched up across segments, slightly higher in Renter-by-Necessity.
  • Supply pipeline surpasses otherwise strong absorption, and the occupancy rate falls to its lowest level since 2014.
  • Advertised asking rents in the single-family rental market also increased following several months of declines.

Rent growth rebounds, occupancy below 95.0%

The U.S. multifamily market resumed rent growth at the start of 2025, with the average advertised asking rent marking the first increase following six months of contractions. The U.S. figure gained $3 to $1,746 in January, up 0.8% year-over-year. Rent growth remained strongest in metros in the Northeast and Midwest, including New York City (5.4%), New Jersey (4.2%), Detroit (4.1%), Kansas City (3.9%) and Philadelphia (3.1%). Meanwhile, Austin (-5.4%) continued to rank lowest, alongside Raleigh (-3.5%), Phoenix (-2.4%), Atlanta (-2.2%) and Orlando (-2.0%).

Rent growth rebounded on a month-over-month basis, up 0.2% in January. Only nine of the top 30 Yardi Matrix metros recorded declines. The Renter-by-Necessity segment posted a higher increase, up 0.3%, while Lifestyle inched up 0.1%. Last year’s leaders in month-over-month rent growth were replaced by metros including Detroit (1.2% overall, 2.3% in Lifestyle and 1.0% in RBN), Houston, Los Angeles and Philadelphia (each 0.8%). Meanwhile, among the markets with declining rents appeared metros including Columbus (-0.7%) and Chicago (-0.5%), but Austin (-1.1%) continued to rank lowest.

The U.S. occupancy rate was at 94.5% in January, down 0.1% year-over-year and the lowest level in more than 10 years. The rate is decreasing especially in high-supply metros in the Sun Belt, surpassed by large volumes of deliveries. Austin, Raleigh-Durham, Charlotte, Nashville, Denver and Phoenix recorded declines in rent growth and occupancy.

Miscellaneous market sentiment

The National Multifamily Housing Council’s annual apartment strategies conference in Las Vegas examined chances for growth and reasons for concern within the U.S. multifamily market. Optimistic factors include the strong economy, expectation that demand will remain robust and liquidity in the capital markets. Concerns arise from persisting high interest rates, as completing sales will be difficult with interest rates above 4.5%, and heightened policy uncertainty.

Even though the unemployment rate remained safeguarded, uncertainty regarding tariffs and immigration cause disquiet. On the downside, these could include increases in the cost of construction materials and a drop in apartment demand and job growth.

Construction of new apartments in 2024 has fallen by more than half compared to 2022, with projects underway in progress. The lack of for-sale homes and high mortgage rates keep retention rates high and move-outs to homeownership low.

 SFRs also posted a rebound in rent growth, up by $5 to $2,157 in January, but year-over-year growth remained negative, down 0.2%. The occupancy rate decreased 0.7% to 94.7%. Not without challenges, the SFR market shows good prospects for growth, as pressures in home affordability persist. In addition, home sales totaled just slightly over 4 million in 2024, the lowest point in 30 years. Meanwhile, investor interest is rising, with 2024 SFR issuers, including Pretium Partners ($3 billion) and Tricon Residential ($2.1 billion), floating $7.8 billion of bonds backed by SFR, one of the highest totals in market history.

Read the full Yardi Matrix Multifamily National Market Report: January 2024.

About the author

Anca Gagiuc

Anca Gagiuc brings more than a decade of experience within the real estate industry. She is a senior associate editor with Commercial Property Executive and Multi-Housing News who also writes monthly multifamily reports at Yardi Matrix.

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