Multifamily advertised rents dropped $6 to an average of $1,750 in September, the steepest one-month decline since November 2022 and the worst September decline since 2009, according to Yardi Matrix. The poor performance comes as demand shows signs of weakening and some markets have an oversupply of properties in the lease-up phase. The change could signal a softening market, the report says.
Full Pipelines Drive Down Rents
More than 525,000 units are in the lease-up phase nationally, increasing competition, Yardi reports. Markets with the weakest rent growth often have the largest pipelines. For example, markets posting negative growth in September included:
- Dallas—35,000 units in lease-up, 3.8% of stock
- Phoenix—22,000, 5.9%
- Austin—18,000, 5.5%
- Charlotte—18,000, 7.6%
Future Demand in Multifamily
Multifamily demand stems from economic and social trends that affect the number and location of households formed. Yardi cites an estimate from Harvard University’s Joint Center for Real Estate Studies predicting household growth of 859,000 per year through 2025. That represents a significant decline from the past. Growth is slowing primarily because birth rates and foreign immigration are dropping, Yardi says.
However, a larger share of households may be renting, offsetting the slowdown in household growth and population. The Joint Center estimates some 2 million renters added in 2024 and 2025—almost double the long-term average.
Quality Drives Price
Other reports show that rents continue to rise for newer premier multifamily housing stock, especially in submarkets that combine desirable features of walkability, convenience and modern amenities. RealPage cites East Nashville, Tenn., Houston’s Greenway/ Upper Kirby neighborhood, and Central Tampa, Fla., as submarkets where renters are paying more for lifestyle premiums. CoStar predicts rent growth will rise by up to 1.9% in 2026.