Multifamily performance started the year on a promising note, with the average U.S. asking rent increasing $3 to $1,746 in January. Year-over-year growth was up 20 basis points to 0.8%, according to the latest Yardi Matrix National Multifamily Report.
Despite strong absorption—Yardi Matrix recorded roughly 400,000 units absorbed last year—the influx of new supply has pressured occupancy in many Sun Belt markets, including Austin, Texas; Charlotte, North Carolina; Denver; Nashville, Tennessee; and Phoenix. This contributed to the national occupancy rate falling to 94.5%, the lowest level since 2014.
“Multifamily got the year rolling in a positive direction, with rents in January breaking a six-month negative growth streak,” noted the report. “One of the questions the industry faces in 2025 is whether demand will repeat 2024’s red-hot level. … January’s performance is an encouraging sign, and many of the drivers of apartment demand still appear to be in place.”
Continuing the trend from 2024, year-over-year rent growth was highest in East Coast gateway metros and Midwest secondary markets in January. New York City again led the way at 5.4% growth year over year, followed by New Jersey at 4.2%; Detroit at 4.1%; Kansas City, Missouri, at 3.9%, and Philadelphia at 3.1%.
High-growth Sun Belt metros continued to dominate the bottom of the rankings for year-over-year rent growth. Austin saw -5.4% year-over-year rent growth last month, followed by Raleigh, North Carolina, at -3.5%; Phoenix at -2.4%; Atlanta at -2.2%; and Orlando, Florida, at -2%.
Month over month, rents inched up 0.2% in January, with just nine of the top 30 metros posting rent drops. The national asking rent increase was driven by the renter-by-necessity segment, with a 0.3% gain, and the lifestyle segment, with a. 0.1% gain.
On the single-family rental side, asking rents also saw gains, rising $5 in January to $2,157, with year-over-year growth increasing 20 basis points to -0.2%.
According to Yardi Matrix, the nation’s ongoing challenges around housing affordability will continue to benefit the sector. Occupancy rates were unchanged at 94.7% in January. Kansas City; Detroit; and Grand Rapids, Michigan, topped the list for the highest year-over-year rent growth, while Austin; Dallas/Fort Worth; and Charlotte were at the bottom of the list.
