National apartment rents have started the year downward, registering the sixth straight month-over-month decline in January. According to Apartment List’s February national rent report, rents fell 0.2% this month and the category remains negative year-over-year at -0.5%.
However, rents are slowly inching back toward positive territory, the report said. The national median monthly rent currently is $1,370, which is down just $3 per month. Rents fell $7 month-over-month in January 2024.
The overall trajectory of rent prices has trended modestly downward since the second half of 2022, following a period of record-setting rent growth in 2021 and early 2022. Despite falling 5% below the August 2022 peak, rents remain nearly 20% higher than they were in January 2021.
National vacancy increased to 6.9% in January, the highest it has been in at least seven years, according to Apartment List’s index, which started in 2017.
Previously, the firm’s vacancy index rose to 6.8% early in the pandemic when many Americans consolidated households amid job losses and economic uncertainty.
“2025 is expected to see completions fall back from the 2024 peak, but there are still nearly 800,000 multifamily units under construction, meaning that even as the supply boom begins to lose steam, it still has some runway in the first half of 2025,” the report said. “As new apartment completions decline, the vacancy index could begin to tighten again, but for now, we’re still seeing vacancies rise, even as rent declines gradually moderate.”
Occupancy has been easing for more than three years amid a wave of new inventory that saw the most new apartment completions since the mid-1980s.
Rents fell in 63 of the nation’s 100 largest cities in January, but positive annual rent growth in 52 of these cities signals a gradual recovery for many individual markets.
Sun Belt metros with rapidly expanding multifamily inventory continue to experience the steepest year-over-year declines. Occupancy fell 7.3% in Austin, 4.5% in Denver and 3.5% in Raleigh, the report found.
The median time on the market of 37 days in January is the highest it has been in any month going back to the start of 2019, when Apartment List began collecting that data.
“Units are currently sitting vacant for 3 days longer than they were at this time last year, and for 11 days longer than they were in January 2022 when the market was just beginning to loosen,” the report said. “The influx of new supply is resulting not only in a growing number of vacant units, but also in an increase in the length of time those units remain unoccupied.”