Declining Apartment Rents Amid Rising Vacancies

The multifamily housing market is experiencing significant shifts as new supply continues to enter the market while demand weakens, particularly among younger workers. In November 2025, the national median rent for apartments decreased by 1% from October, settling at $1,367. This marks the fourth consecutive month of decline, with rents down 1.1% compared to November 2024 and a notable 5.2% drop from the peak in 2022. The national multifamily vacancy rate held steady at 7.2% in November, reflecting a broader trend of increasing vacancies.

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The decline in demand is largely attributed to challenges faced by the 18- to 34-year-old demographic, which traditionally represents a significant portion of renters. According to Grant Montgomery, CoStar's national director of multifamily analytics, approximately 32.5% of individuals in this age group are currently living with family, the highest rate observed in recent years. This trend is indicative of rising rental costs and a challenging job market for recent graduates, which have hindered their ability to form new households.

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The multifamily construction sector has seen a historic surge in recent years, but this growth is now beginning to slow. Despite the pullback, a substantial number of new units are still being introduced to the market, coinciding with a period of diminished demand. The fall season typically witnesses a slowdown in multifamily rents, but the current decline is more pronounced than in previous years. CoStar reported that the recent monthly drops in median rent are the most significant in 15 years of tracking.

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The ongoing decline in apartment rents and the increase in vacancies could have broader implications for the real estate market. Investors and property owners may need to adjust their strategies in response to these changing dynamics. The weakening demand from younger renters, coupled with the influx of new supply, suggests a potential shift in the market that could influence future investment decisions.

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Apartment List researchers noted that earlier in the year, there were indications that annual growth in rents might turn positive for the first time since mid-2023. However, this potential rebound stalled during a notably slow summer, leading to the current downward trend in rents.

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Critics argue that the rising rental costs and the challenges faced by younger renters highlight systemic issues within the housing market. The inability of young individuals to secure affordable housing options raises concerns about long-term economic stability and the viability of the rental market moving forward.

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• “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

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• “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

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The multifamily housing market is at a critical juncture, with declining rents and rising vacancies posing challenges for both renters and investors alike.

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