Vacancies are up and rental prices are down, thanks to a plentiful amount of new supply reaching the multifamily housing market, coupled with weakening demand, according to a new report from Apartment List.
The report said that the national median rent for Apartment prices fell 1% in November from October, and stands at $1,367. That was the fourth consecutive month-over-month decline. Meanwhile, the national multifamily vacancy rate remained at 7.2% in November.
Apartment rents are down 1.1% from November 2024 and have dropped 5.2% from their 2022 peak, the report said.
“Earlier this year, it appeared that annual growth was on track to flip positive for the first time since mid-2023; however, that rebound stalled out and reversed course during a particularly slow summer,” Apartment List researchers said.
CNBC reported that after hitting a record high for this index that dates back to 2017, in October, the national multifamily vacancy rate remained at 7.2% in November.
Median Monthly Rents Have Biggest Drop in 15 Years
A good supply of new units is still coming online at a time of much weaker demand, the report said.
CNBC reported that the fall historically records the largest slowdown in multifamily rents, but that this year it’s more pronounced. According to CNBC, CoStar reported the biggest monthly drops in median rent it had seen in 15 years of tracking, primarily because more young people are struggling to form new households.
“That 18- to 34-year-old group … I think it’s up to 32.5% of those now are living with family, and that’s the highest it’s been in a while,” Grant Montgomery, CoStar’s national director of multifamily analytics, said in a statement. “I think it reflects high rental costs that have risen over the years, as well as the tougher job market for young folks just coming out of college.”
Montgomery added: “That is where a lot of demand traditionally comes from, the core renter demand is from that sort of younger base.”
CNBC reported that some markets are seeing rents fall more rapidly than others because of local economic factors.
It said that Las Vegas, for example, is seeing slower tourism, which in turn hits jobs there. Boston, it said, has seen a decline in federal funding for biotech as well as a reduction in the number of foreign students for its colleges and universities. Austin is seeing the biggest hit to rents, thanks largely to more construction of multifamily units.
CNBC said that rents are softening nationally and landlords are boosting concessions, renters are by in large searching in more affordable markets to call home.
The Midwest Gets Plenty of Renters’ Attention
Property management software company Yardi reported that the most-searched-for market is Cincinnati, followed by Atlanta, Georgia, and Kansas City, Missouri.
“The Midwest, in particular, drew more attention than ever, signaling that many of its ‘hidden gem’ markets are no longer a secret,” according to the Yardi report that found 11 of the top 30 cities for renter demand were in the Midwest.
Yardi revised its expectations for 2026 supply, saying that while new supply will fall through 2027, a larger-than-expected under-construction pipeline caused it to increase its previous quarterly estimates for 2025 and 2026 by 6.8% and 2.5%, respectively, according to CNBC.
As construction continues to slow into next year, the overall market should stabilize somewhat, according to the Apartment List report.
“That said, the supply boom still has a bit of runway remaining, and the demand outlook has begun to appear weaker amid a shaky labor market,” Apartment List researchers said.
