Apartment Rents Keep Falling as Vacancies Hit Record High

Apartment rents continue to decline nationwide as vacancy rates hit 7.2%, the highest in years.

sarah

Dec 2, 2025 - 20:34

Apartment Rents Keep Falling as Vacancies Hit Record High

There's still plenty of new supply coming into the multifamily housing market. At the same time, weak demand, especially from the youngest workers, is increasing vacancy rates and driving down rents.

According to Apartment List, the national median apartment rent in November fell 1% from October to $1,367. This was the fourth consecutive month-over-month decline. Apartment rents have declined 1.1% since November 2024 and 5.2% from their peak in 2022.

According to Apartment List researchers, "Earlier this year, it seemed that annual growth was on track to turn positive for the first time since mid-2023; however, this rebound stalled and reversed, especially during the slow summer."

After reaching a record high for this index in October, the lowest since 2017, the national multifamily vacancy rate remained at 7.2% in November.

The historic boom in multifamily construction over the past few years is now slowing, but a good supply of new units is coming online even during times of very low demand.

This fall has historically seen the largest slowdown in multifamily rents, but this year it's even more so. CoStar reported the largest monthly decline in average rents in 15 years of tracking. This is primarily due to more young people struggling to find new homes.

"That 18- to 34-year-old group... I think up to 32.5% of them are now living with family, and that's the highest it's been in quite some time," said Grant Montgomery, CoStar's national director of multifamily analytics. "I think this reflects the high rent costs that have increased over the past few years, as well as the difficult job market for young people fresh out of college."

"Traditionally, a lot of the demand comes from there; the primary tenant demand is from this young base," he said. Local economic factors are driving rents down faster in some markets than others. For example, tourism is slowing in Las Vegas, impacting job losses. Boston has seen a decrease in federal funding for biotech, as well as a decline in the number of foreign students at its colleges and universities; both of which are having a significant impact on its rental sector. Rents in Austin, Texas, are being hit the hardest because construction of multifamily units remains high there.

While rents are falling nationwide and landlords are increasing concessions, tenants are increasingly looking for 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 seekers were most active last summer, traditionally the busiest time for new leasing. St. Louis saw the largest quarter-on-quarter increase in renter interest, and Washington, D.C., dropped from the top spot to No. 4.

"The Midwest, in particular, has garnered more attention than ever, revealing that many of its 'hidden gem' markets are no longer secrets," according to the report, which found that 11 of the top 30 cities in renter demand were in the Midwest.

Yardi also revised its expectations for 2026 supply, saying new supply will slow through 2027, but due to a larger-than-expected under-construction pipeline, it raised its previous quarterly estimates for 2025 and 2026 by 6.8% and 2.5%, respectively.

According to the Apartment List report, as construction slows next year, the overall market will stabilize somewhat.

"Despite this, there is still some supply overhang left, and the demand outlook appears weak amid a weak labor market," the researchers wrote.