A leading global provider of AI-driven software platforms to the real estate industry, today released its third quarter 2025 analysis of the multifamily housing sector. During the quarter, the average advertised rent price decreased for only the second time since 2009. RealPage data also shows that home values have risen at twice the pace of market-rate rental units since 2020, pushing the typical mortgage payment well above the nation’s average rent and keeping many households in the rental market longer.
“Resident retention has increased and is approaching an all-time high as the current cost of renting is significantly less expensive than homeownership,” said Carl Whitaker, chief economist at RealPage. “With residents staying put longer, owners and operators have an opportunity to create an even higher-quality resident experience and build a stronger sense of community at their properties.”
Q3 Industry Takeaways
- Occupancy backtracked quarter-over-quarter to 95.4%.
- Rents are down nearly 8% in Denver and Austin and a little more than 5% in Phoenix.
- The South region has added a quarter of a million units in the past 12 months (more than twice the second-fastest growing West region). As such, rents are down 1.7% in the past 12 months in the South while the West saw rents fall 0.4%. Conversely, the Midwest & Northeast regions have seen rents grow 2.3% and 1.9%, respectively.
- San Francisco’s 7.1% rent growth in the past 12 months is far ahead of second-ranking Chicago (4.5%).
“According to RealPage data, the outlook for the U.S. apartment market in the next 12 months is that supply will cool considerably from its current level,” added Whitaker.
Q4 Industry Outlook
- Nationwide, supply is starting to cool with 105,000 units delivered in the third quarter, which is the fewest since the second quarter of 2023, and a 35% decline versus third quarter 2024.
- The 324,000 units scheduled to be completed in the next 12 months would be the fewest in a given 12-month window since the second quarter 2020.
- Construction activity shows supply will remain below normal for some time once this current wave of deliveries subsides.
- Currently, just 519,000 market-rate apartment units are under construction nationally; the fewest number in more than 10 years.
RealPage believes the continued rise in resident retention with new lease shopping suggests that demand for market-rate apartments remains healthy. Current trends do not mirror past economic down cycles whereby both retention and new lease activity contracted significantly. In fact, should strong resident retention persist, the multifamily industry could see an optimistic client base and improved market momentum heading into next year.
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