- The March 2025 Apartment List national rent index rose 0.3% in February, signaling the potential end of six months of declines.
- National median rent is now $1,375, slightly up from January but still down 4.6% from the 2022 peak.
- YoY rent growth is returning, with 75% of the top 100 US cities seeing rent growth in February.
- Vacancy rates hit a new record high of 6.9%, driven by a surge in multifamily construction.
- The supply of new multifamily units is expected to slow, but 800K units remain under construction, adding to market pressures.
After six months of declines, the March 2025 Apartment List national rent index showed positive MoM growth of 0.3% in February, a modest rent recovery.
While rents are inching back into positive territory, however, the national median rent is still down 0.4% YoY, continuing a trend of sharper seasonal discounts compared to pre-pandemic norms.
National Rent Trends
The national median rent stood at $1,375 in February, an increase of $4 from January but still $5 lower than in February 2024. This is a 4.6% dip, or $67 per month, from the peak of mid-2022.
Generally, rents have been slipping since 2H22, cooling after 2021 and early 2022’s record-setting rent growth.
Despite this slowdown, average rents remain nearly 20% higher than in January 2021, reflecting the residual effects of the housing boom.
Region by Region
As much as 75% of the nation’s 100 largest cities saw rents rise in February, with YoY rent growth turning positive in many large cities.
However, the national rent index is still negative, primarily due to steeper drops in Sun Belt metros like Austin, Denver, and Raleigh. These cities have seen rapid multifamily development, contributing to higher supply and downward pressure on rents.
Apartment List notes that while annual rent growth bottomed out at 1.4% in September 2023, it’s since begun to rise, signaling a potential recovery. The firm states, “With the supply wave now getting past its peak, it appears that the era of declining rents could be nearing its end.”
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Record-High Vacancies
Multifamily vacancy rates have steadily climbed since October 2021, when they hit a low of 3.8%. By February 2025, the vacancy rate reached a record 6.9%, surpassing the previous peak of 6.8%.
The rising vacancies are largely due to a surge in multifamily inventory, with over 600K new units coming online in 2024, marking a 65% increase from the previous year.
While completions are expected to slow this year, 800K multifamily units are still under construction, which will continue to influence supply and demand dynamics.
Less Time on Market
Apartment List’s time-on-market index revealed that units leased in February spent a median of 36 days on the market, slightly down from 37 days in January.
While this decline aligns with the seasonal return to positive rent growth, it still marks the longest time-on-market in February in the past six years.
The influx of new multifamily units is contributing not only to rising vacancy rates but also to longer vacancies. Units are now sitting vacant three days longer than at this time last year and 10 days longer than in February 2022, when the market began loosening.
Balanced Market Ahead
As rent growth turns positive and vacancy rates climb, the US multifamily sector appears to move into a more balanced phase. The end of the rent decline cycle may be near, particularly as the construction boom slows.
While higher vacancies and longer times on the market are still present, the steadily rising rents and growing annual rent growth suggest the multifamily market is on the cusp of stabilization.
With the supply of new units expected to taper off, the multifamily market may find itself balancing between steady rent growth and manageable vacancy rates in 2025.
