According to recent data from Apartment List, the national multifamily vacancy rate has surged to 7.1% in July, marking a record high since the start of the monthly index in 2017.
This uptick in vacancies comes amid a notable decline in rental prices, which have decreased by 0.8% compared to the same month last year.
Despite a seasonal increase in rents observed in 37 out of 54 metropolitan areas with populations exceeding 1 million from June to July, the overall rental landscape is still plagued by an oversupply of apartments.
The supply of new multifamily units that flooded the market in the past few years continues to be absorbed, contributing to the rising vacancy rates and softening rental prices.
Landlords find the market is not as saturated as it was earlier this year; however, it still remains heavily tilted in favor of renters.
In 2022, the market saw over 600,000 new multifamily units introduced, representing a 65% increase from the previous year—the highest annual addition since 1986, according to Apartment List.
The average time taken to lease units has also shifted, taking about 28 days in July—a slight increase from June, though lower than the January peak of 37 days.
National median rent remained stable at $1,402 in July compared to June, but the growth has reportedly stalled during a peak moving season known for typically faster rent increases.
In fact, rents have dipped by 0.8% year-over-year, reflecting a troubling trend of three consecutive months of negative rental growth—a stark contrast to the positive trajectory seen earlier this year.
The multifamily rental market is showing signs of sluggishness, with key metrics indicating ongoing challenges.
A statement from Apartment List highlights the complexities posed by macroeconomic factors, including tariffs and policies from President Donald Trump’s administration, which seem to dampen demand this moving season.
Regionally, the report indicated that while rents increased in some cities, less than half of these markets are witnessing positive rental growth compared to last year.
A noticeable decline in rents is predominantly surfacing in regions, particularly the South and Mountain West, which were once considered hot markets.
Austin, Texas, has been flagged as especially weak, experiencing a significant rental price drop of 6.8% from the previous July.
Cities like Denver and Phoenix are also seeing substantial rent reductions close behind.
On a brighter note, San Francisco stands out with a 4.6% increase in rents from last year, showcasing pockets of strength in the rental market.
Fresno, California, and Chicago are also highlighted as cities showing resilience amid the current trends.
While the wave of new construction appears to be tapering off, the number of units available in the first half of this year was still above the long-term average.
As construction slows further in the latter half of this year and into 2026, conditions may shift, potentially leading to tighter market dynamics.
image source from：nbcchicago
