After six months of declines, the March 2025 Apartment List national rent index returned to positive month-over-month rent growth, increasing by 0.3% in February in line with seasonal trends. Rents are inching back toward positive territory but remain negative at -0.4%, marking the third consecutive winter in which seasonal discounts have been notably sharper than the pre-pandemic norm, according to the index.
National median rent is $1,375, up $4 per month compared to last month but down $5 from February 2024, according to Apartment List. Over the past 2.5 years, the national median rent has gradually dipped 4.6%, or $67 per month, below the mid-2022 peak.
Rent prices have been ebbing and flowing since the second half of 2022 with a modestly downward trajectory following record-setting growth in 2021 and early 2022, said Apartment List. Despite this cool down, typical rent prices remain nearly 20% higher than their January 2021 level.
Three-quarters of the nation’s 100 largest cities saw rents increase in February, and rent growth is positive on a year-over-year basis in the majority of large cities. The national index, however, remains negative due to steeper declines in Sun Belt metros including Austin, Denver and Raleigh, that are rapidly expanding their multifamily inventory.
Year-over-year rent growth bottomed out at 1.4% in September 2023 but is back on the rise, said Apartment List.
“With the supply wave now getting past its peak, it appears that the era of declining rents could be nearing its end,” the online marketplace said.
Vacancy has been steadily climbing in the multifamily sector after bottoming in October 2021 at 3.8%. In February, the vacancy rate reached 6.9%, surpassing the previous peak of 6.8 percent to set a new record for the highest reading in its history of collecting data, which goes back to 2017.
More than 600,000 new multifamily units hit the market last year, a 65% increase from 2022 and the most new supply in a single year since 1986. Completions are expected to recede from that peak this year and though the supply boom may be losing steam, it still has some runway with 800,000 multifamily units under construction.
Apartment List’s new time on market index revealed that units leased in February spent a median of 36 days on the market, down from 37 days in January. This slight decline is in line with the seasonal return to positive month-over-month growth but remains the longest time-on-market reading in February during the past six years, the firm said.
“Units are currently sitting vacant for three days longer than they were at this time last year, and for 10 days longer than they were in February 2022 when the market was just beginning to loosen,” Apartment List 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.”