Declining Apartment Rents Amid Rising Vacancies

The multifamily housing market is experiencing significant shifts, characterized by increasing vacancies and declining rents. 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 5.2% from their peak in 2022. The national multifamily vacancy rate held steady at 7.2% in November, reflecting a broader trend of weakening demand.

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Several factors are driving these trends. A substantial influx of new apartment supply is entering the market, coinciding with a notable decrease in demand, particularly among younger workers. According to Apartment List researchers, the anticipated rebound in rental growth that seemed possible earlier in the year has stalled, largely due to a slow summer. CoStar reported that the current decline in median rents is the most significant observed in 15 years of tracking data.

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A critical demographic shift is influencing the rental market. The percentage of individuals aged 18 to 34 living with family has risen to 32.5%, the highest level in recent years. Grant Montgomery, CoStar's national director of multifamily analytics, attributes this trend to high rental costs and a challenging job market for recent college graduates. This demographic traditionally represents a core segment of renter demand, and their struggles to form new households are contributing to the current market dynamics.

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Industry experts have noted that the multifamily construction surge seen in previous years is beginning to taper off. However, a substantial number of new units are still being introduced to the market, exacerbating the imbalance between supply and demand. Montgomery emphasized the importance of the younger demographic in sustaining rental demand, stating, "That is where a lot of demand traditionally comes from, the core renter demand is from that sort of younger base."

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Critics of the current market conditions argue that the rising vacancy rates and falling rents could lead to long-term instability in the housing market. Some industry analysts warn that if the trend continues, it may deter future investments in multifamily housing, potentially exacerbating the housing supply crisis in the long run.

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Looking ahead, the multifamily housing market may continue to face challenges as economic conditions evolve. Analysts will be closely monitoring how demographic trends and economic factors influence rental demand and vacancy rates in the coming months.

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