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A lot of new supply is still making its way through the multifamily housing market. That, along with weak demand, especially from younger workers, is driving vacancies and hiring.
The national median rent for apartments fell 1 percent in November from October, and now stands at $1,367, according to Apartment Listings. It was the fourth straight monthly decline. Apartment rents have fallen 1.1 percent since November 2024 and are down 5.2 percent from their 2022 peak.
“Earlier this year, it appeared that annual growth was on track to turn positive for the first time since mid-2023. However, it has since rebounded and reversed course, especially slowly over the summer,” according to apartment listings researchers.
The national multifamily vacancy rate stood at 7.2 percent in November, after hitting a record high for that index in 2017 in October.
Historic surges in multi-unit construction over the past few years are now receding, but a good supply of new units is still coming online at a time of weaker demand.
The fall historically sees the biggest slowdown in multifamily rents, but this year has been even more pronounced. Costar reported the biggest monthly drop in median rent it had seen in 15 years of tracking. The main reason is that more and more young people are struggling to form new households.
“That 18- to 34-year-old group … I think it’s up to 32.5% of people who are living with families now, and it’s the highest it’s been in a while,” said Grant Montgomery, Costar’s national director of multifamily analytics. “I think it reflects the high rental costs that have increased over the years, as well as the tight job market for young people coming out of college.”
“That’s where there’s traditionally been a lot of demand, the primary tenant demand from such a small base,” he said.
This weakness is reflected in the stock of large public apartment rates. Names like Avalon Bayfor , for , for , . Equity Residents And Camden Property Trust All years are down to date.
Some markets are seeing rent declines faster than others due to local economic factors. For example, Las Vegas is experiencing slower tourism, which in turn hits jobs there. Boston has seen a decline in federal funding for biotech as well as a decline in foreign students for its colleges and universities. Both are hitting its rental sector hard. Austin, Texas, is seeing the biggest hit to rents thanks to more construction of multifamily units.
Although rents are softening nationally, and landlords are increasing incentives, renters are increasingly finding more affordable markets.
Cincinnati was the most-searched market, followed by Atlanta and Kansas City, Missouri, according to a Yardi report that looked at where apartment hunters were active last summer, traditionally the busiest time for new leases. St. Louis saw the biggest quarterly jump in renter interest, and Washington, D.C., jumped from the top to No. 4.
“In particular, the Midwest drew more attention than ever, indicating that many of its ‘hidden money’ markets are no longer a secret,” according to the report, which found that 11 of the top 30 cities for renter demand were in the Midwest.
Yardi also revised down its expectations for 2026 supply, saying that while new supply would be lower during 2027, a lower-than-expected pipeline construction boosted its previous quarter estimates to 6.8% and 2.5% for 2025 and 2026, respectively.
As construction continues to taper off next year, the overall market should stabilize somewhat, according to the Apartment List report.
“That said, the supply boom still has little runway left, and the demand outlook is beginning to look weak amid a shaky labor market,” the researchers wrote.