Multifamily rent growth enters standby mode, yet investors aren’t deterred
National Multifamily Report – December 2025
The U.S. multifamily market wrapped up 2025 on a somber note as sluggish late-year performance wiped away all gains from earlier in the year, according to Yardi Matrix’s latest survey of 140 markets. Average national advertised asking rents declined $5 month-over-month and $16 quarter-over-quarter to $1,735 in December, reducing annual growth to 0 percent, down 20 basis points year-over-year.
This fourth-quarter showing marked the weakest rendition since the global financial crisis. Rates across the build-to-rent market registered the steepest drop in more than a decade, falling $4 to $2,180 in December, down 1 percent year-over-year.
Other years with zero multifamily annual advertised rent growth included 2020—the first pandemic year—and 2010, which served as a turning point after the global financial crisis. While national annual growth was flat in 2025, gateway and Midwest markets bucked trends with metros such as New York City (5.8 percent), Chicago (3.6 percent), Twin Cities, Minn. (3.2 percent) and Kansas City, Mo. (2.6 percent) recording positive change. Western and Sun Belt markets were in the negative, including Austin, Texas, (-5.2 percent), Phoenix (-4.1 percent), Denver (-3.9 percent) and Las Vegas (-2.5 percent). Meanwhile, average occupancy held fast, remaining at 94.6 percent in November, unchanged compared to a year ago.
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Investment shows tepid growth despite short-term rental losses
Month-over-month, U.S. advertised rents ticked down 0.3 percent in December. Just six out of the Matrix top 30 markets registered gains, most of them concentrated in the Midwest, such as Kansas City (0.7 percent), Columbus, Ohio, Baltimore and Detroit (0.4 percent each). Such markets emerged as most resilient, thanks in part to having limited new supply and greater affordability.
Conversely, supply-heavy Sun Belt metros experienced negative growth amid softening demand. Coastal markets face a different, non-supply-related issue as high rents leave them more exposed to economic uncertainties amid renter demand realignments.
Investors were not deterred by 2025’s advertised rental performance. In fact, multifamily sales volume grew to $83.2 billion, up from $82.4 billion in 2024 and $69.5 billion in 2023. Sun Belt and secondary metros registered most activity, such as Dallas and Seattle ($3.9 billion each), Phoenix and Miami ($3.5 billion each) and Atlanta ($3.4 billion). Meanwhile, gateway markets witnessed strong demand, marked by low capitalization rates in San Francisco’s South Bay (3.8 percent) and Peninsula (4.1 percent), as well as Manhattan (also 4.1 percent) and Los Angeles (4.3 percent).
The markets with large deal volumes had a slightly higher cap rate such as Phoenix (5.4 percent), North Dallas (5.2 percent) and Seattle (4.7 percent). Yet, pricing was tight almost everywhere, suggesting a significant amount of dry powder sought to acquire multifamily assets, leading to fierce competition.
At a national level, the average single-family build-to-rent advertised asking rates fell $4 to $2,180 in December, down 1.0 percent year-over-year, marking the steepest decline in more than 10 years, even surpassing November’s 0.7 percent drop.
However, this decrease wasn’t felt uniformly across the nation, with Midwest markets posting gains, including the Twin Cities (7.7 percent), Chicago (7.0 percent) and Grand Rapids (4.5 percent). The sharp rent decline doesn’t reflect weak demand, as occupancy remained solid at 94.9 percent, up 0.1 percent year-over-year, suggesting that owners are willing to accept a price correction to maintain higher occupancy levels.
Source: Multihousing News
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