According to Yardi Matrix, average asking rents fell by $1 in December to $1,718, leaving year-end rent growth at just 0.3 percent. That marks a sharp deceleration from the gains seen in 2021 and 2022 as the sector continues to digest record new supply. Occupancy held relatively firm at 94.7 percent, suggesting demand remains steady despite heavy deliveries.

Roughly 445,000 new units were absorbed nationally in 2025, the highest on record. While that level of absorption is encouraging, it was not enough to keep rents growing in high-development markets like Austin, Atlanta, and Phoenix, where concessions remain widespread. In contrast, metros with more limited construction pipelines such as Chicago, New York, and parts of the Midwest saw modest rent gains and greater pricing stability. Gateway markets are also benefiting from slower construction timelines and a rebound in urban renter demand.

The single-family rental segment also saw a shift in 2025. Advertised rents declined 1.0 percent year-over-year, marking the steepest drop in over a decade, but occupancy remained solid at 94.9 percent. Operators are increasingly focused on maintaining high occupancy and lease stability rather than pushing rents, especially in high-supply Sunbelt markets.

The report notes that new multifamily starts have declined significantly, which should ease pressure on rent growth in 2026 and beyond. Operating expenses continue to climb, particularly for insurance and payroll, putting more emphasis on revenue management and cost control. Cap rates remained generally stable in the fourth quarter, although investment sales volume was limited as buyers and sellers work to recalibrate pricing. Yardi also highlighted growing investor interest in value-add and workforce housing, where fundamentals are proving more resilient.

For lenders and investors, the near-term may remain challenging in terms of rent growth, but core asset performance is holding up better than expected in many metros. With construction slowing and leasing activity holding steady, the market appears to be moving toward a more balanced footing in 2026.

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