Multifamily rents fell again in November, with the average advertised rent decreasing $8 to $1,740. This is the fourth consecutive month with negative growth. According to Yardi Matrix’s National Multifamily Report, advertised rents have dropped $17 since they peaked during the summer. In addition, year-over-year rent growth at 0.2% is the lowest level since the first quarter of 2021, when the market started its recovery from the pandemic.
Yardi Matrix said “the recent drop is less than ideal, but more worrisome is how widespread the decline is.” Despite strong absorption, the high-supply markets of Austin, Texas; Denver; Phoenix; and Dallas have seen advertised rents be negative for a year or more. However, markets that had been performing well, such as Columbus, Ohio; Indianapolis; New Jersey; and San Francisco and San Jose, California, saw advertised rents go from positive to negative in November.
“There are several possibilities why rents are dropping. One is seasonality. The winter months are weak for rent growth historically, but over the last few years (since rents climbed sharply in the wake of the pandemic) the winter months have been more volatile. Rents have dropped in each of the last four Novembers, though modest recoveries started in the first quarter of the following year,” noted the report.
According to Yardi Matrix, another possibility for the weakened rent growth is the supply-demand imbalance.
“The large delivery pipeline is being absorbed as demand flags,” said the report. “Immigration policy, weak consumer confidence, and slowing job growth have caused absorption to decelerate. While year-to-date absorption is strong, the number of apartment units absorbed in October was the lowest in several years.”
Year-over-year rent growth continued to be strongest in gateway and Midwest markets in November. New York continued to lead the way with 5.7% annual growth, followed by Chicago, 3.8%; the Twin Cities, 2.9%; and San Francisco, 2.6%. Negative rent growth continued to be seen in many high-supply Sun Belt metros, with Austin at -5%; Denver and Phoenix at -4.1%; Las Vegas at -2.1%; and Dallas at -2%.
The national occupancy rate has been resilient, holding steady at 94.7%, unchanged from a year ago. Yardi Matrix said most markets recorded gains, led by Atlanta at 0.9%, the Twin Cities at 0.5%, and San Francisco and Phoenix at 0.4%.
Rents at both lifestyle and renter-by-necessity assets were down month over month in October. The Twin Cities was only one of Yardi Matrix’s top 30 metros to see positive advertised rent growth in November.
The sharpest monthly drops, according to Yardi Matrix, were in New York at -1.2%; Austin and Seattle at -1%; and Denver and New Jersey, -0.9%.
“While negative rent growth has recently been led by high-supply markets, this month’s declines were broad-based and somewhat unexpected,” the report noted. “Northeast markets such as New York and New Jersey—which have been among the strongest performers on an annual basis—were both in the top five for declines. Similarly, San Francisco had been recovering throughout the year but experienced a 0.8% decrease.
Advertised rents also saw a significant drop on the single-family rental (SFR) side, falling $10 to $2,185 in November, with year-over-year growth at -0.5%. This marks the largest November drop in over a decade. While some seasonal softening is normal, Yardi Matrix said this year’s decline, after seeing 1.4% gains in November 2023 and 2024, signals slowing demand.
“Unlike the multifamily sector, where most metros posted negative growth, the SFR market is more evenly split, with 15 metros showing flat or positive growth and 15 recording declines,” according to Yardi Matrix.
The strongest gains were in the Twin Cities and Chicago, both at 7.9%. The steepest losses were found in the Sun Belt: Austin, -3.9%; Charleston, South Carolina, -3.8%; and Pensacola, Florida, -2.5%.