2025 Apartment Rent Growth Expectations Across The Nation

US apartment rent growth is expected to pick up in 2025, though regional supply pressure, demand levels, and historical performance will impact trajectories, according to RealPage.

Zooming Out

Some markets, particularly those in the Midwest and parts of the Northeast, are poised for stable rent growth in 2025. They’re expected to see rent hikes of 3% to 4%, largely thanks to a balance of manageable supply and steady demand.

Local economies in cities like Chicago, Cincinnati, Indianapolis, Kansas City, Pittsburgh, and Virginia Beach will continue to generate a consistent need for apartments, allowing rents to grow at historically normal rates.

These cities are characterized by minimal new construction pressure and steady demand, allowing rent growth to follow predictable patterns, and providing more stability for landlords and investors.

Poised For Recovery

Many coastal gateway cities that saw declining demand due to outbound migration and shifting economic conditions are now stabilizing. 

With supply peaks in the rearview, areas like San Francisco, DC, Seattle, and Boston are seeing demand return and occupancy levels creep back to historical norms. As a result, rent growth should hover around 3% to 4% in 2025, supported by tighter occupancy levels and easing new construction.

These cities are enjoying a return to form after a period of slower leasing activity. And with less new supply, they should maintain a healthier balance between supply and demand moving forward.

Modest Growth Ahead

Certain markets are expected to see rent growth close to the projected US average of 2% to 3%. These areas have limited new supply coming online, but demand factors will prevent them from seeing the same level of rent growth as other parts of the country. 

Cities like Baltimore, Philadelphia, Cleveland, and Milwaukee will likely see modest growth, though factors like economic conditions or local challenges could cap any significant increases.

In these metros, demand will likely keep pace with existing supply, but not enough to push rents much higher than the national average. These cities will likely maintain stable but unspectacular growth.

Sun Belt Markets

Several Sun Belt markets, including Dallas, Houston, Las Vegas, Orlando, and Miami, have been building up significant supply. 

As many of these areas hit peak construction levels, supply is expected to outpace demand, which could temper rent growth. Experts predict rent growth between 1.5% and 2.5% this year, as prices stabilize after years of rapid expansion.

With new construction still influencing rents, these Sun Belt metros will likely see a more muted recovery. However, the strong underlying demand from population growth will help these regions maintain relatively steady rent hikes.

Lagging Markets

In some metro areas, weakening demand or excess supply will likely lead to slower-than-expected rent growth. 

Cities like Atlanta, Los Angeles, San Diego, and Minneapolis are facing challenges in maintaining strong demand, which prevents these markets from rebounding as quickly as others. These markets may see rent growth below 2%, as weak demand and manageable supply keep rents flat.

Despite some economic recovery in these regions, weaker demand has also kept occupancy levels lower than expected. Investors may face challenges in achieving higher-than-average rent hikes.

Struggling Markets

Meanwhile, supply pressure will continue to hold back rent growth in Austin, Phoenix, San Antonio, Raleigh, and Charlotte. 

These Sun Belt metros enjoyed the most significant construction over the past few years, but all that excess supply will likely carry over into 2025. Rent growth is expected to lag, and some markets may see flat or negative growth due to the oversupply.

These cities, which saw rapid construction and migration, are now facing a slow recovery. Though demand remains relatively strong, the overwhelming amount of new apartments coming to market will weigh on rent growth, which is expected to be sluggish in 1H25.

Looking Ahead

As 2025 unfolds, the US apartment market will see variable rent growth, driven by differing local conditions. While some markets are set for steady, stable growth, others are grappling with supply pressures or demand challenges. 

Investors and renters alike will need to monitor these market-level trends closely to make informed decisions, as regional dynamics will continue playing a key role in the broader rent landscape.