2025 Expectations for the U.S. Apartment Market

Demand for apartments in 2025 is expected to remain solid – if not excellent – based on 2024 readings. Continued job growth, strong wage growth, improving affordability, improved consumer sentiment, near-record resident retention and fewer move-outs to the single-family for-purchase market colored the 2024 market landscape. These things appear likely to persist well into 2025.

Supply is also forecast to remain well above historically normal levels as well, though the 2025 forecast suggests that supply should quickly taper off towards the back half of the year. This can already be seen at a more localized metro level, for example, whereby several markets hit peak supply in late 2024. Still, the calendar 2025 should see the addition of another 500,000-plus market-rate multifamily units, according to RealPage Market Analytics. That will influence near-term market expectations.

Occupancy improved throughout 2024 despite immense supply pressure – yet another testament to the depth of demand for market-rate multifamily rentals. An expectation of continued, strong demand while the pace of new deliveries finally leveling off (if not altogether decelerating in some markets) suggests that occupancy should soon begin to re-approach more historically-normal levels (in the low-to-mid-95% range) in 2025.

Rent growth for the nation in 2025 is expected to trail previous decade norms as supply remains a key force on the market for at least an additional 12 months. Expectations at the metro level, however, may exhibit considerable differences.

For more rent growth expectations in 2025 at the market level, stay tuned for Friday’s post from Carl Whitaker.