U.S., October 11, 2025
News Summary
The U.S. apartment market has recorded its first rent decline since 2009, with effective asking rents falling by 0.3% from July to September. The year-end data indicates a decrease of 0.1% overall for the year. A significant drop in market-rate apartment absorption, linked to poor job growth and cautious consumer behavior, reflects a shift in housing demand. New construction rates have increased, yet occupancy rates have dipped to 95.4%. Overall, the demand for rental properties remains above the decade average as most renters choose to stay put amidst economic challenges.
U.S. Apartment Market Sees First Rent Decline Since 2009, Reflecting Economic Slowdown
The U.S. apartment market is experiencing its first rent decline in over a decade as the economy shows signs of cooling. Effective asking rents fell by 0.3% from July to September 2025, marking the first rent reduction during this period since 2009. For the year ending in the third quarter, rents decreased by 0.1%, indicating a shift in market dynamics amid economic uncertainties.
New data reveals approximately 637,000 market-rate apartments were absorbed in the year ending Q3 2025, a significant drop from nearly 784,900 units absorbed in the previous quarter, which represented a record high. The sluggish new lease activity has been largely attributed to weaker job growth and cautious consumer behavior, highlighting the direct impact of broader economic trends on housing demand.
Nationwide, around 474,800 new apartment units were completed in the past year, with 105,500 completed in Q3 2025 alone. Despite the new units, occupancy rates have dipped to 95.4%, a decline of 30 basis points that ended five consecutive quarters of growth in this metric. Moreover, concessions have become more common, with 22% of properties offering discounts averaging 6.2% to attract renters.
Interestingly, resident retention rates have increased year-over-year, indicating that many renters are choosing to stay in their apartments amidst the current economic uncertainty.
The extent of rent declines varies significantly across regions. Markets in the South and West have experienced the steepest declines, with cities like Denver and Austin seeing drops close to 8% and around 5% in Phoenix and San Antonio. In contrast, markets with less aggressive construction, such as the Midwest and Northeast, have shown resilience, with areas like San Francisco and San Jose seeing moderate rent growth.
Despite the downward trends, demand for rental properties remains above the decade average, primarily as most tenants are opting to stay put rather than move. Major property management companies, including AvalonBay Communities, Equity Residential, Essex Property Trust, and UDR, Inc., are preparing to report their third-quarter earnings while focusing on maintaining performance amid ongoing economic challenges. Predictions suggest AvalonBay will report Q3 revenues of $772.14 million, marking a 5.15% increase year-over-year. Equity Residential anticipates same-store revenue growth of 2.6% to 3.2% for the entire year, with Q3 revenues expected at $781.41 million. Essex Property Trust estimates a 5.51% revenue increase year-over-year with quarterly revenues estimated at $475.51 million. Finally, UDR is projected to see a 2.37% increase in quarterly revenues, with an estimate of $430.13 million.
Overall, the trends in the U.S. apartment market suggest a normalization rather than a crisis, as demand stabilizes amidst the prevailing economic challenges.
FAQ
What was the percentage decline in effective asking rents from July to September 2025?
Effective asking rents fell by 0.3% between July and September 2025.
How many market-rate apartments were absorbed in the year-ending Q3 2025?
Approximately 637,000 market-rate apartments were absorbed in the year-ending Q3 2025.
What was the occupancy rate in Q3 2025?
Occupancy rates decreased to 95.4% in Q3 2025.
What percentage of properties are offering concessions as of Q3 2025?
About 22% of properties are offering concessions averaging 6.2% to attract renters.
Which regions experienced the steepest rent declines?
Markets in the South and West, particularly Denver and Austin, experienced the steepest declines, nearing 8%.
| Q3 2025 Key Features | Data |
|---|---|
| Effective Rent Decline | 0.3% |
| Market-Rate Apartments Absorbed | 637,000 |
| New Apartment Units Completed | 474,800 |
| Occupancy Rate | 95.4% |
| Properties Offering Concessions | 22% |
| Date/Time | Event | Status |
|---|---|---|
| September 2025 | Q3 Rent Decline | First drop since 2009 |
| Q3 2025 | Market Absorption | 637,000 apartments absorbed |
| Q3 2025 | New Apartment Units Completed | 474,800 units completed |
Deeper Dive: News & Info About This Topic
HERE Resources
Platte Canyon Capital Acquires Allure Apartments in San Antonio
New Braunfels Real Estate Market Shows Mixed Results in March 2025
San Antonio Mother Faces Heartbreak After Car Theft Linked to Tragedy
Rental Rates in San Antonio and Austin Decline Significantly
San Antonio’s Apartment Surge Amid Vacancy Confusion
San Antonio and New Braunfels Rise in 2024 Real Estate Rankings
Additional Resources
- Boston Real Estate Times: U.S. Apartment Rents Dip
- Wikipedia: Housing Market
- The Globe and Mail: U.S. Apartment Market Cools
- Google Search: U.S. Apartment Market 2025
- Forbes: Housing Market Predictions
- Google Scholar: U.S. Apartment Rent Trends
- Multifamily Dive: Rents Down in September
- Encyclopedia Britannica: Apartment Market Trends
- New York Post: Cash Buyers in the Housing Market
- Google News: U.S. Apartment Rent News
Author: STAFF HERE SAN ANTONIO WRITER
The SAN ANTONIO STAFF WRITER represents the experienced team at HERESanAntonio.com, your go-to source for actionable local news and information in San Antonio, Bexar County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Fiesta San Antonio, San Antonio Stock Show & Rodeo, and Dia de los Muertos. Our coverage extends to key organizations like the Greater San Antonio Chamber of Commerce and United Way of San Antonio and Bexar County, plus leading businesses in retail, insurance, and energy that power the local economy such as H-E-B, USAA, and Valero Energy. As part of the broader HERE network, including HEREAustinTX.com, HERECollegeStation.com, HEREDallas.com, and HEREHouston.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
