Due to a widening supply and demand imbalance, Origin Investments is forecasting year-over-year Class A multifamily rent growth to return to historical levels—up 2.4% by January 2026.
In its 2025 Rent Growth Forecast, Multilytics, its proprietary suite of machine-learning models, forecasts Class A rent growth gains at or above the 3% historical national average in the West, Northeast, and South. However, the Southwest region is only expected to see a 0.2% year-over-year growth rate.
Origin’s five-year compounded annual growth rate for rents in the 15 cities where it invests and/or owns and manages multifamily assets are all above 4%, ranging from 4.2% in Austin, Texas, to 5.7% in Tampa, Florida.
The number of projected unit deliveries this year is approximately 600,000, according to Newmark. However, the number of deliveries is expected to drop 15.2% in 2025 and 53.8% in 2026. Demand, especially in high-growth markets, isn’t expected to change with absorption keeping pace.
“We’re seeing record delivery of new product, the result of unprecedented new development that broke ground three-plus years ago, when interest rates were at their lowest,” said co-CEO David Scherer. “But that tremendous wave of deliveries isn’t being replaced. In the absence of the next wave, I see a world where rents continue escalating in the next one, two, three, and maybe even four years.”
Origin is predicting rent growth in 15 target markets where it continues to evaluate potential developments and acquisitions. According to Multilytics, 12 of these markets will return to positive growth by June 2025: Atlanta; Charlotte and Raleigh, North Carolina; Colorado Springs, Colorado; Dallas; Houston; Jacksonville, Orlando, and Tampa, Florida; Las Vegas; Nashville, Tennessee; and Phoenix. Austin, Denver, and San Antonio are expected to linger in the negative through mid-2025.
However, all 15 target markets are forecast to return to positive territory by January 2026, with seven markets surpassing 4%, six topping at least 3%, and two—Denver and Austin—between 1.5% and 2%.
In other markets, according to Origin, year-over-year Class A rent growth is expected to exceed 4% in Miami and Seattle; meet or exceed 3% in New York, Los Angeles, and San Francisco; and exceed 2.5% in Chicago and San Diego.
“From an investment perspective, I believe we are at the beginning of a pretty significant bull cycle for rents,” Scherer added. “At this point, it will take an exogenous shock to bring it back to the supply side.”
According to Ryan Brown, data scientist at Origin, a deep recession that would impact household formation and a meaningful decline in homeownership costs would be two shocks that could alter the pace of absorption.
“The combination of a pricing reset and a significant reduction in mortgage rates isn’t likely to occur quickly enough to make a meaningful difference in the cost of renting versus buying,” he said. “As a result, we are increasingly becoming a nation of renters.”
Origin’s prediction last year for a return to normalized rent growth was tempered by unquantifiable market risks. Despite a changed landscape and a transitioning political picture, these unquantifiable risks remain a concern.
The report noted that it’s too early to predict the impacts of the new Trump administration in 2025. President-elect Donald Trump’s proposals to increase tariffs could lead to higher interest rates and rising inflation, while other proposals could spur job creation.
