The national median monthly rent closed out 2024 at $1,373 in December, after declining by 0.6 percent, or $8, from the prior month, Apartment List says in their January report, ending the year lower than it started.
Year-over-year rent growth nationally also currently stands at -0.6 percent, meaning that the typical apartment is currently renting for slightly less than it was one year ago.
In dollar terms, the national median rent today is $8 per month cheaper than it was one year ago and $50 per month less than in August 2022, but still remains $225 per month higher than the January 2021 level.
“The end of the year, in particular, generally sees the slowest rental market activity, as few households move during the holiday season. That lack of demand tends to result in modest discounts from property owners with vacancies to fill. In keeping with that pattern, 2024 ended with a fifth consecutive monthly dip in December.
“As moving activity picks back up in the new year, we are likely to see these monthly declines moderate and then flip back to positive growth in the coming months,” Apartment List economists write in the report.
Apartment vacancies remain elevated
On the supply side of the rental market, “our national vacancy index continues trending up slowly and currently sits at 6.8 percent, the highest reading since the onset of the pandemic. After a historic tightening in 2021, multifamily occupancy has been slowly but consistently easing for over two years amid an influx of new inventory. 2024 saw the most new apartment completions since the mid-1980s, and with nearly 800 thousand units still in the construction pipeline, the supply boom has runway to continue into 2025.”
However, vacancy trends can be highly localized, Apartment List points out.
List-to-Lease time hits a new high
The median time on market of 36 days in December “is the highest reading that we’ve seen for this metric in any month going back to the start of 2019, when the data series begins.
“It seems that the influx of new supply is resulting not only in a growing number of vacant units, but also in an increase in the length of time those units remain unoccupied,” the report says.
Conclusion
Rent increases are currently being moderated by a robust construction pipeline that delivered a decades-high number of new apartment units in 2024.
“While rental demand has bounced back a bit this year, recent signs of labor market softness could dampen demand going forward. With this in mind, we expect that new supply will continue to outstrip demand into 2025,” Apartment List says in the report.
