The multifamily rent forecast from Yardi Matrix says the multifamily sector is heading into the summer leasing season amid a complex mix of economic signals.
While payrolls and consumer spending remain generally healthy, “forward‑looking measures such as consumer sentiment and Institute for Supply Management new orders suggest momentum is moderating,” writes Andrew Semmes, Yardi Matrix senior research analyst, in the report.
“Overall, the balance of risk has tilted modestly toward slower growth, but a recession is not our base case,” Semmes says.
Rent growth in 2025 has underperformed historic norms. While the softening is most pronounced in high‑supply Sun Belt metros, even many Midwest and Northeast markets are posting smaller gains than in 2024.
Highlights of the report:
- Recent adjustments to U.S. trade policy have been broader than many market participants expected.
- Higher tariffs could raise input costs for construction and consumer goods.
- However, some domestic manufacturers may benefit from reduced import competition.
- Changes to immigration rules appear to be slowing labor‑force growth.
“A smaller pool of available workers would temper household formation and apartment demand while also reducing the number of new jobs needed to keep unemployment steady.
“Proposed federal tax reductions and ongoing deregulatory initiatives could support business investment and disposable incomes. The magnitude and timing of any boost to multifamily demand, however, remain uncertain and subject to debate among economists,” Semmes writes.
Yardi Matrix predicts slower leasing activity once the current supply of new apartment construction is absorbed.
“Nevertheless, our national baseline forecast remains unchanged at 1.6 percent rent growth in 2025 and 1.2 percent in 2026, before trending toward a long‑run steady‑state range of 3-4 percent,” the report says.
A key takeaway from the report is that underlying fundamentals do not signal a severe downtown.
“Instead, we expect a muted growth environment in the near term, followed by a gradual return to long‑term-trend rent increases as supply‑demand conditions rebalance,” Semmes writes.
