Modest Momentum Builds in February Rent Growth, Occupancy Readings

Apartment rents gained a modicum of momentum in February, on the heels of a similar trend in January, altogether pointing toward stabilization in rent change after almost two years of near-stagnant growth.

Apartment rents in market-rate units grew 0.41% in February, according to data from RealPage Market Analytics. That rate fell below the long-term norm for February rent growth of 0.53% from 2015 to 2024 but was still the highest February reading since 2022. At the same time, the nation’s once-in-a-generation apartment supply wave is cresting, with supply dissipating more quickly in some markets than others. As the construction pipeline empties, demand rallies and operators are generally more able to realize occupancy gains and rent momentum.

In the year-ending February 2025, effective asking rents in professionally managed market-rate units grew 0.8%. Although that rate fell easily below long-term norms, it marked the highest annual rate seen since July 2023.

In the monthly reading, the delta between February 2025’s rent growth rate (0.41%) and the year-ago reading from February 2024 (0.25%) marked a slight bump in momentum. In other words, the below-average reading from last year was replaced with a slightly less below-average reading, appearing to indicate a trend toward more normal rent growth going forward.

In terms of occupancy, demand pushed the national reading up 10 basis points (bps) over last month to stand at 95% in February, a 90-bps gain year-over-year. Notably, occupancy ticked up 20 bps month-over-month in a few high supply markets, including Phoenix, Fort Worth and Orlando. While these three markets rank among the bottom in the nation for rent cuts, strengthening occupancy indicates that operators there continue to recognize solid demand.

“About 80% of major U.S. markets recorded a month-over-month increase in occupancy,” RealPage Chief Economist Carl Whitaker said. “While that's generally on trend with seasonal expectations, it's worth noting that the share of markets recording a positive increase was larger than usual, and once more supports the narrative that demand is catching up with supply – especially as the pace of supply delivering eases in most major markets.”

Rents continued to be cut on an annual basis in about one-third of the nation’s 50 largest apartment markets, generally correlating to those with the highest supply delivering. The nation’s perennial laggard of late – Austin – posted its least severe monthly rent cut in nine months at 0.15% in February. Still, on an annual basis, rents in Austin were cut at the deepest clip in the nation at 7.2%.

At the top of the rent growth leaderboard, Chicago and neighboring Midwest region markets claimed many of the top spots nationwide. Apartment rents in Chicago grew 4.2% in the year-ending February 2025, the highest rate in the nation among major markets. Outside of the Midwest, Richmond (3.7%), Pittsburgh (3.3%), San Jose (3.3%) and Washington, DC (3.2%) all landed in the top 10 markets nationally.

Also of note, concession utilization continues to increase modestly, as expected. The average concession in February 2025 for stabilized apartment assets equaled approximately 31 days discounted.

“Nationally, concessions were up about 1% from February 2024 to February 2025, with offerings more common among South region markets, led by Cape Coral, San Antonio, Crestview-Destin and Myrtle Beach, all of which have at least one quarter of vacant units offering a discount,” Whitaker said.