The national median rent dipped by 0.8 percent in December, closing the year with five straight months of rent decline, according to the January report from Apartment List.
While November provided the steepest drop, and over the next few months the market should creep back and reach positive rent growth in February or March, according to Apartment List researchers.
The change in rental market seasonality
In addition to steeper winter declines since 2022, we have also observed a shift in the timing of rental market seasonality.
Whereas May used to be peak rent growth, over the past three years March has been the hottest month, with rent growth trending down during what was, prior to the pandemic, the peak moving months. The flip to negative rent growth now arrives in August, whereas it used to arrive in September.
Highlights of the report
- The national median rent fell 0.8% in December, and now stands at $1,356.
- Rent prices nationally are down 1.3% 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 5.9%.
- The national multifamily vacancy rate ran up to 7.3% this month, a record high for the index that started in 2017. 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 39 days to get leased after being listed, which is three days longer than one year ago and represents another record high back to 2019.
- The Austin, TX metro continues to have the softest conditions among the nation’s large rental markets, with the median rent there down by 6.6% over the past year. At the other end of the spectrum, the Providence, RI metro remains atop our rankings of fastest year-over-year rent growth at +5.6%.
Multifamily vacancy rate hits 7.3%, a new peak
As the supply wave continues to recede, these occupancy and pricing trends should begin to gradually shift, but for now the market is still absorbing a swell of new units.
At the same time, a shaky labor market seems to be putting a damper on housing demand, another factor contributing to sluggish rental market conditions persisting longer than we anticipated at the outset of this year.
List-to-Lease time also reaches a new peak: 39 days
This increase in list-to-lease time is in line with rent growth turning negative and a general off-season cooling of the rental market.
Time on market is up more than three full days compared to last December, and more than twice as long as it was in summer 2021, when the average unit was turning over in just 18 days.
Conclusion
“As we close the door on 2025, our key market indicators tell the story of a third consecutive slow year for the multifamily industry. This year rent prices continued their downward trend while vacancies and time-on-market reached new highs.
“Forward-looking data suggest this sluggishness will persist into the first half 2026, as we continue to work through a backlog of new construction. Much will depend on rental demand, whose outlook is shaky given weakness in the labor market and general economic uncertainty.
“If demand worsens, it will take longer for the market to metabolize the recent growth in the rent stock, even if the construction industry slows in tandem,” Apartment List researchers write.
