Multifamily asking rents continued to fall for the second month, with the average U.S. asking rent decreasing $5 to an average of $1,744 in November. Year-over-year growth was consistent with the levels recorded during 2024—decreasing 10 basis points to 0.9%, according to the latest Yardi Matrix National Multifamily Report. The national occupancy was unchanged at 94.7%.
According to Yardi Matrix, November tends to be a calm month for the industry due to seasonality, with rents barely changing. “The question this year is whether the calm belies turbulence ahead, as the industry anticipates changes to policy and interest rates,” noted the report
While worries about the federal government implementing rent control are gone under President-elect Trump’s administration, other changes impacting the industry could be on the horizon. Government-sponsored enterprises Fannie Mae and Freddie Mac, the most active multifamily lenders, could face changes regarding possible privatization. And threats around tariffs and immigrant deportations have raised concerns around costs, delays, and reduced demand for housing.
“Higher inflation could keep interest rates elevated and potentially stall increased transaction activity,” the report stated.
Year-over-year rent growth continued to be highest in East Coast gateway metros and Midwest secondary markets in November. New York City again led the way at 5% growth year over year, followed by Kansas City, Missouri, at 3.4%; Detroit at 3.2%; Washington, D.C., at 2.8%; and Chicago and Indianapolis at 2.7%.
High-growth Sun Belt metros continued to be at the bottom of the rankings for year-over-year rent growth. Austin, Texas, saw -5.6% year-over-year rent growth last month, followed by Raleigh, North Carolina, at -2.7%; Atlanta at -2.6%; Phoenix at -2.2%; and Orlando, Florida, at -2.1%.
Month over month, 25 of the top 30 metros posted rent drops. The national asking rent decrease was due to the lifestyle segment, which saw advertised rents dropping 0.3% in November. Rents for the renter-by-necessity segment declined by 0.1%.
On the single-family rental side, asking rents also saw declines, falling $7 in November to $2,150, with year-over-year growth at 0.3%. Occupancy rates were 95.1% in October, down 40 basis points year over year. Kansas City, Raleigh, and Grand Rapids, Michigan, topped the list for the highest year-over-year rent growth, while the Florida cities of Miami, Jacksonville, and Pensacola were at the bottom of the list.
According to Yardi Matrix, the build-to-rent stock will hit record deliveries this year with 36,683 units, but declining starts will limit new supply in the second half of 2025 and beyond.
“The sector is impacted by the same factors limiting housing production of all types, including the cost of materials and labor, rising rates of construction financing, and concerns about oversupply in markets with robust multifamily development.”
November’s report revealed multifamily expense growth is decelerating; however, it remains a concern. Through October, expenses in market-rate properties increased an average 4% year to date, down from 9% in 2023 and 7.1% in 2022. Net operating income (NOI) growth continues to be positive in market-rate communities, with income growth of 2.6% year to date producing a 1.9% increase in NOI.
Yardi Matrix added that expense growth will likely continue to moderate, partially due to drivers of growth such as insurance slowing. Growth in other expense categories, such as labor and maintenance, also have moderated and are expected to remain muted unless driven by external circumstances or changes in policy.
“Rent growth will remain moderate until the current wave of supply in many markets is absorbed, which could take another year or more,” noted the report. “Consequently, improving operating efficiency to keep costs down should remain a priority for property owners.”
