The national median rent dropped by 1.0 percent in November, marking the fourth straight monthly decline, as vacancies hit a record high, Apartment List writes in the December report.
“November is historically the rental market’s slowest month, and it is likely prices will continue to decline modestly in the coming December and January. This is in line with the typical seasonal pattern of rent growth, as fewer renters are looking to move when temperatures dip and the holiday season approaches,” the Apartment List research team writes in the December report.
Highlights of the report
- The national median rent now stands at $1,367. “It’s likely that we will close out the year with an additional modest rent decline in December,” the research team writes.
- Rent prices nationally are down 1.1% compared to one year ago. Year-over-year rent growth has been slightly negative for more than two full years, and the national median rent has now fallen from its 2022 peak by a total of 5.2%.
- The national multifamily vacancy rate remains at 7.2% this month, “a record high for our index. We’re past the peak of a multifamily construction surge, but a healthy supply of new units is still hitting the market and colliding with sluggish demand, causing vacancies to continue trending up.”
- Units are taking an average of 36 days to get leased after being listed, two days longer than at this time last year.
Year-Over-Year
“November’s rent decline this year (-1.0 percent) was a bit steeper than last year’s (-0.8 percent), and so we observe a small dip in year-over-year rent growth, down to -1.1 percent nationwide,” the report says.
“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.”
Falling National Median Rent
The national median rent is down $16 per month compared to November 2024.
As prices have trended downward in recent years, the national median rent has now fallen below its August 2022 peak by a total of 5.1 percent, or $75 per month.
Multifamily Vacancy Rate Hits 7.2%, a New Peak
The market is still absorbing the swell of new construction units, the report says.
As a result of all this new inventory, more vacant units are sitting on the market, meaning that property owners face more competition for renters and have less pricing leverage.
“Our national vacancy index – which measures the average vacancy rate of stabilized properties in our marketplace – sits at 7.2 in November. This represents an all-time high for this data series, going back to the start of 2017,” the report says.
List-to-Lease Ticks Up for Fifth Straight Month
As more vacant units have come onto the market, those units have also been sitting vacant for somewhat longer.
“Our time on market index tells us how long it takes for units to get leased after they are first listed on our platform. This “list-to-lease” time is rising as we approach the new year, and currently sits at 36 days in November, just shy of the peak set last January,” Apartment List writes.
CoStar: Biggest Rent Drop In 15 Years
The fall historically sees the biggest slowdown in multifamily rents, but this year it’s even more pronounced.
The real-estate information group CoStar reported the biggest monthly drops in median rent it had seen in 15 years of tracking. The primary reason is that more young people are struggling to form new households.
“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,” said Grant Montgomery, CoStar’s national director of multifamily analytics, in an interview with Diana Orlick of CNBC. “I think it reflects high rental costs that have risen over the years, as well as the tougher job market for young folks just coming out of college.”
“That is where a lot of demand traditionally comes from, the core renter demand is from that sort of younger base,” he said.
The weakness is showing up in stocks of the major public apartment REITs. Names like AvalonBay, Equity Residential and Camden Property Trust are all down year to date.
Conclusion
“All of our key indicators are pointing toward ongoing sluggishness in the multifamily rental market – rent prices are down and the vacancy rate is at an all-time high.
“As construction slows further during the tail end of this year and into 2026, rent prices and occupancy should begin to stabilize, and a return to tighter market conditions remains on the horizon.
“That said, the supply boom still has a bit of runway remaining, and the demand outlook has begun to appear weaker amid a shaky labor market. These factors could lengthen the time that it takes for the market to metabolize the recent growth in the rental stock,” Apartment List researchers write.
