- U.S. multifamily rent growth eased to 0.9% in Q2 2025, down from 1.2% in Q1.
- San Francisco led rent growth among top 50 markets with a 5.1% increase.
- New housing supply was up 37% over the previous quarter but 11% below Q2 2024 levels.
The multifamily market in the U.S. saw a slight deceleration in rent growth during the second quarter of 2025, according to the latest Apartments.com report. National year-over-year asking rent growth slowed to 0.9%, compared to 1.2% in the first quarter. The national rent per unit rose to $1,773 by the end of the quarter, with quarter-over-quarter rents increasing by 0.6%.
Supply and demand dynamics continue to shape the multifamily landscape. The second quarter recorded 151,440 units of absorption—a 21% increase over Q1 2025 but 9% below Q2 2024 figures. Meanwhile, supply additions numbered 175,655 units, marking a 37% quarter-over-quarter increase, though still 11% lower than the same quarter in 2024. Construction starts remain on a downward trajectory, suggesting potential future supply constraints.
Among the top 50 markets, San Francisco experienced the strongest annual asking rent growth at 5.1%, followed by Chicago at 3.8% and San Jose at 3.0%. Contrastingly, Austin saw a 4.3% decline in rent over the past year, with significant drops also in Denver (-3.3%) and Phoenix (-2.6%). The Sun Belt continues to face oversupply challenges, contributing to rent decreases in several markets.
Despite an overall easing of rent growth, absorption was primarily driven by luxury 4&5-Star units, representing 75% of total absorption. However, this segment witnessed relatively weak annual rent growth of 0.5% due to an 11.5% vacancy rate. In contrast, 3-Star properties experienced stronger demand, with a 7.5% vacancy rate and 1.1% annual rent growth.
Looking ahead, the market is expected to introduce 485,000 new units in 2025, a 30% decrease compared to 2024, suggesting that the easing supply wave may help rebalance market conditions. Given the diverse geographical and market segment performances, conditions could vary widely across the U.S. apartment rental market.
CoStar Group (CSGP, Financial), the report's publisher, remains a key player in the real estate data and analytics sector, providing valuable insights and technology to the industry. The group continues to focus on transforming the real estate landscape with comprehensive market intelligence and innovative solutions.
