Landlords missing renters? Is the vacancy story about more than supply as immigrant departures may be fueling some of the surge in rental vacancies? An opinion piece by August Wilder Johnson.
By August Wilder Johnson
The U.S. rental market is entering a new phase—and it’s not just about new supply. Amid a historic surge in apartment construction and moderating rents, a quieter but critical shift is reshaping housing demand: America’s renter population is shrinking, in part because immigrants are leaving.
In the second half of 2025, the national rental vacancy rate climbed to 7.2%, its highest level since at least 2017, according to Apartment List’s December 2025 National Rent Report. One year earlier, the national vacancy rate hovered closer to 6.6%. The time it takes to lease a vacant unit has also doubled from 18 days in 2021 to 36 days in late 2025. These trends indicate a decisive shift from the white-hot rental market of the early 2020s, when low vacancy and bidding wars were the norm.
Much of the current narrative around rising vacancies focuses on record-breaking supply: More than 600,000 new multifamily units were delivered in 2024, with even more expected through 2025. But the demand side of the equation is increasingly shaped by national immigration policy. And this year, the pipeline of new renters from abroad has not just slowed—it has reversed.
A Vanishing Tenant Base
The Department of Homeland Security reports that more than 2 million immigrants have exited the United States in 2025, including both deportations and voluntary departures 1. This figure includes approximately 548,000 formal removals by federal immigration authorities between January and October 2025, with expectations of surpassing 600,000 by year’s end—a modern record. In addition, roughly 1.6 million undocumented immigrants have “self-deported” since January, leaving the country without formal removal proceedings 2.
These removals coincide with a broader population shift. Pew Research Center data show that the total U.S. foreign-born population declined from 53.3 million in January 2025 to 51.9 million by June, a drop of 1.4 million—the first such decline in over half a century. Most of this outflow came from undocumented immigrants, although legal immigration inflows have also slowed under tighter federal policies.
Given that immigrants disproportionately rent rather than own—especially in their first years in the country—the impact on multifamily demand is direct. With a shrinking pool of immigrant households, landlords in many metro areas are seeing units sit vacant longer than projected.
Demand Deficit Meets Supply Boom
Vacancy rates are climbing at a time when the country is still digesting the largest apartment construction boom in a generation. As of early November, more than 950,000 units were under construction nationally, according to Yardi Matrix. Additionally, the pipeline included more than 4.6 million units in the planning and permitting stages.5
Stephen Miran, a Federal Reserve Board appointee in 2025, argued that the decline in immigration would “free up more housing and lower rental costs” by reducing pressure on the market 4. As a result, housing analysts warn that even modest overbuilding—when paired with a demographic slowdown—can quickly lead to elevated vacancy rates, softened rent growth, and greater pressure on operating margins.
Vacancy’s Double-Edged Sword
For renters, higher vacancies may sound like good news—and in the short term, it is. National median rents were down about 1.1% year-over-year as of December 2025, according to Apartment List. That marks the first annual rent decline in nearly five years, offering relief after years of relentless increases.
But industry experts warn that the longer-term implications of a shrinking renter population are more complicated. Immigrants don’t just fill apartments — they build and maintain them and support local economies. Continuing outflows could lead to labor shortages in construction and property maintenance. In addition, we may see a slower economy and a decline in the feasibility of new projects.
Alex Nowrasteh, vice president for economic and social policy studies at the Cato Institute, said, “If millions of undocumented immigrants were suddenly removed, they’d leave behind a lot of empty houses and apartments,” causing housing demand to fall accordingly 6. Similarly, research from the Urban Institute emphasized that immigrants made up more than 23 percent of the construction workforce in 2023, with about half being undocumented 7.
The Road Ahead
If immigration policies remain tight and voluntary departures continue, the U.S. could face a prolonged period of flat or declining population growth—something that hasn’t happened in modern history without a major recession or pandemic.
For now, multifamily operators are adjusting by:
- Offering concessions
- Re-evaluating lease-up timelines, and
- Closely watching household formation statistics
As 2026 approaches, one thing is clear: The vacancy story is no longer just about supply—it’s also about who’s still here to rent.
Citations
Footnotes
- Fox News, “Deportations under Trump surge past 500K in 2025,” October 2025.
- Department of Homeland Security internal estimates.
- Pew Research Center, “What the data says about immigrants in the U.S.,” August 2025.
- Associated Press, “Trump’s Federal Reserve appointee seeks steeper rate cuts,” September 2025.
- Multi-Housing News, December 2025.
- Yield Pro, “Mass deportations loom for apartments,” February 2025.
- Urban Institute, “Mass Deportations Would Worsen Our Housing Crisis,” February 2025.
About the author:
August Wilder Johnson is an expert in commercial real estate investment.
