San Francisco’s apartment vacancy has now fallen to a 20-year low, as a scarce amount of product breaks ground and demand remains high.
According to data from CoStar, the market’s vacancy rate stands at just 3.8% while asking rents shot up 11% year-over-year in June, reflecting one of the strongest apartment recoveries among major US markets.
In fact, San Francisco’s market rents now sit more than double the national average of $1,800, clocking in at $3,690 per month in June, up 1.8% from May rents, according to CoStar.
This has led to San Francisco regaining its position as the nation’s most expensive apartment market, a position New York has held for the past six years.
“In just a couple of years, San Francisco has gone from one of the hardest-hit apartment markets during the pandemic to the nation’s most expensive rental market once again. The pace of the recovery has been remarkable,” Nigel Hughes, senior director of market analytics for CoStar Group and Apartments.com, told GlobeSt.com.
Strong AI-driven hiring and limited apartment construction have created a perfect recipe for rent growth in San Francisco.
Plus, the 1.8% rent growth in June was the highest posted during the recent growth cycle. And it is spreading throughout the Bay Area, with San Francisco, San Jose and the East Bay now ranked first, second and third in the nation, respectively, for annual rent growth.
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Slower Delivery Times Shape
San Francisco’s apartment construction activity in 2026 reflects a market where development remains significant even as delivery volumes slow.
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