December 2024
Multifamily rents are expected to continue to climb in 2025 as a widening supply and demand imbalance drives pricing for apartments across the U.S.
Origin Investments’ 2025 Rent Growth Forecast shows national annual year-over-year (YOY) rent growth will increase by 2.4% by January 2026 — and between 4% and 5.7% in markets such as Colorado Springs, Dallas, Jacksonville, Las Vegas, Orlando, Raleigh and Tampa. The report focuses on Class A properties and is based on the firm’s proprietary suite of machine learning models, Multilytics.®
Rent growth gains in the West, Northeast and Southeast regions of the country are expected to be at or above the 3% historical national average. The Southwest region is an outlier where YOY rent growth is predicted to be only 0.2%.
“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 David Scherer, co-CEO, Origin Investments. “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.”
In the Multilytics report, Origin’s five-year compounded annual growth rate (CAGR) for rents in the 15 cities where it invests and/or owns and manages multifamily assets all are greater than 4.0%, and ranges from 4.2% in Austin to 5.7% in Tampa.
Multifamily development to reach 600,000 units
Newmark projects the number of expected deliveries in 2024 to be approximately 600,000. However, the pipeline of deliveries is expected to fall precipitously, by 15.2% in 2025 and 53.8% in 2026. Demand for units, especially in growth markets around the country, isn’t expected to change, with absorption keeping pace with mew deliveries.
At the market level, Origin is predicting rent growth in 15 targeted markets where the firm continues to evaluate future potential developments or acquisitions. According to Multilytics, by June 2025 all but three of Origin’s target markets will return to positive growth, with Austin, San Antonio and Denver lingering in the negative. However, by January 2026, all markets will return to positive territory, with seven markets topping 4% and six increasing by at least 3%. Two markets will have rent growth from 1.5% to 2.0%.
The Origin markets experiencing the greatest YOY annual rent growth for Class A apartments are Orlando, 5.6%; Jacksonville, 5.6%; Las Vegas, 4.6%; Tampa, 4.4%; and Raleigh, 4.4%. The two markets with rent growth lower than 2% are Denver, 1.7% and Austin, 1.6%. YOY Class A apartment growth will exceed 4.0% in Miami (4.3%) and Seattle (4.4%); meet or exceed 3.0% in New York (3.0%), Los Angeles (3.0%) and San Francisco (3.1%), and exceed 2.5% in Chicago (2.6%) and San Diego (2.8%).
