Apartment Rents Continue to Fall, Vacancy Rates Hit Record Highs

After a period of significant increases, the cost of renting an apartment in the United States is declining, with vacancy rates reaching unprecedented levels. This trend, which began in late 2024, is expected to continue as a substantial supply of new units comes online whereas demand weakens, particularly among younger renters.

National Rent Trends

According to Apartment List, the national median rent for apartments fell 1% in November 2025, settling at $1,367. This marks the fourth consecutive month-over-month decline. Year-over-year, rents are down 1.1% from November 2024 and have decreased by 5.2% from their peak in 2022. CNBC reports that earlier projections of annual growth turning positive stalled during the summer months.

Record Vacancy Rates

The national multifamily vacancy rate reached a record high of 7.2% in November 2025, according to Apartment List. This surge in vacancies is attributed to a significant increase in multifamily construction over the past few years, coupled with softening demand.

Shifting Demand and Affordability

Prospective renters are increasingly seeking studio and one-bedroom apartments, driving up demand for these smaller units. NerdWallet notes that rents are more unaffordable than ever, with 22.6 million households finding rentals unaffordable in 2023 – an all-time high.

Regional Variations and Construction Slowdown

A construction boom in the Sunbelt, followed by a slowdown in domestic migration, is contributing to rising vacancy rates in the South and West. Bank of America Institute highlights this dynamic. While the historic surge in multifamily construction is beginning to gradual, a considerable number of new units are still entering the market.

Rent Growth vs. Inflation

Despite the overall decline in rents, the shelter index, which includes rent, continues to outpace overall inflation. The Bureau of Labor Statistics reported in January 2026 that the shelter index rose 3%, while overall inflation was 2.4%. Rent alone increased by 2.8% over the 12-month period ending in January. It’s important to note that CPI data reflects a lag due to lease renewal cycles.

Looking Ahead

As of August 2025, the U.S. Median rent was $1,713, a decrease of $46 (-2.6%) from its peak in August 2022, but $249 (17%) higher than pre-pandemic levels. Realtor.com data shows that renters are increasingly optimistic about homeownership, with nearly 60% planning to buy a home within one to two years. The rental market is expected to continue experiencing seasonal slowdowns, and the balance between supply and demand will be a key factor in determining future rent trends.