- Multifamily rents are forecasted to grow by 1.5% in 2025, a slower but positive pace supported by economic growth and stable fundamentals.
- The Northeast and Midwest markets, including New York, Chicago, and Washington, DC, will drive rent growth, with increases of 3.1%, 2.6%, and 2.4%.
- Sun Belt markets like Austin, Phoenix, and Nashville will see weaker growth due to high apartment inventory and oversupply.
- Multifamily deliveries will decline in 2025 after a record 550K units were added in 2024, easing supply pressures.
The multifamily market is positioned for steady growth in 2025, with rents projected to rise by 1.5%, as reported by GlobeSt.
Although this marks a deceleration from the post-pandemic boom, the outlook remains optimistic, supported by economic expansion, healthy consumer spending, and job growth.
Region by Region
Rent growth will vary across regions, with the Northeast and Midwest leading due to robust demand and limited supply.
- Top Markets: New York (3.1%), Chicago (2.6%), and Washington, D.C. (2.4%) are expected to see above-average growth, driven by strong fundamentals and constrained pipelines.
- Sun Belt Slowdown: Cities like Austin, Phoenix, and Nashville will face weaker growth as an oversupply of new apartments dampens rent increases.
Shifting Supply Trends
After a record 550K multifamily units were delivered in 2024, new completions are set to decline in 2025.
While this will ease supply pressures in the long term, Sun Belt markets will continue to grapple with excess inventory in the short term. As demand catches up, these markets are likely to see stronger performance beyond 2025.
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Policy Considerations
According to a Yardi Matrix report, the US economy grew by 2.8% in Q3 and is expected to maintain moderate growth, creating a favorable backdrop for multifamily performance.
The report also highlights the potential impacts of the incoming Trump administration. While deregulation and tax reductions may boost the multifamily sector, other policies—such as tariff threats and immigration restrictions—could raise construction costs and disrupt demand dynamics.
Looking Ahead
Despite lingering challenges from 2024, the multifamily sector is poised for moderate growth in 2025. With a stabilizing supply landscape and regional variances shaping rent trends, landlords and developers can expect steady performance, particularly in regions with constrained inventory.
And the Sun Belt, while facing near-term headwinds, may find relief as the delivery pipeline slows and demand absorbs existing stock.
