Despite broader economic uncertainties, the multifamily rental market continued its measured recovery in March 2025. The latest data from Yardi Matrix shows another month of modest rent increases, fueled by resilient demand, stable occupancy, and early signs of stabilization in Class A properties.
While not all regions are experiencing the same momentum, national trends point toward a cautiously optimistic outlook for owners and investors alike.
Rent Prices Rise Again in March
In March, the average U.S. asking rent increased by $5, reaching $1,755 per month. This reflects a 0.3% month-over-month gain and a 1.0% year-over-year increase. Although the annual growth is down slightly from February’s 1.2%, it still indicates that rent levels are on a firm upward track.
This continued growth is especially notable in a market adjusting to the pressure of inflation, interest rate uncertainty, and a flood of new apartment inventory.
Lifestyle vs. Renter-by-Necessity: A Tale of Two Segments
Yardi Matrix tracks rent trends across two major property classes—Lifestyle (Class A) and Renter-by-Necessity (RBN) (Class B & C):
Lifestyle Properties (Class A)
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Experienced +0.2% YoY rent growth, marking three consecutive months of positive gains.
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These properties had previously suffered declines in 16 of the past 18 months, especially in oversupplied urban cores.
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Recovery is slow, with gains still below the pre-pandemic average of 2.5% per year.
Renter-by-Necessity Properties
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Showed +1.9% YoY rent growth, outperforming Lifestyle units.
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Growth has hovered around 2% over the past year, though still short of the pre-2020 norm of 3.5%.
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This segment continues to show stability due to strong renter demand and limited affordability options in many metros.
Single-Family Rentals Hold Steady
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The average rent for single-family rentals (SFRs) rose $5 to $2,169 in March.
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However, annual rent growth was flat (0%), a sign that the SFR market may be stabilizing after years of steep gains.
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Occupancy in the SFR space held at 94.7%, unchanged month-over-month but down 0.7 percentage points YoY.
National Occupancy Remains Strong Amid New Supply
Despite elevated construction activity, national occupancy for multifamily rentals remained steady at 94.5%. This is a positive sign, indicating that demand is still strong enough to absorb the new inventory entering the market.
High occupancy levels—especially above the 94% threshold—typically support continued rent growth and are a key metric for multifamily investors.
Regional Winners and Losers: Which Metros Are Moving?
Multifamily rent trends continue to vary widely across metros. Here are the markets with the most notable annual changes in rent growth:
Top 5 Metros (YoY Rent Growth)
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New York – +5.5%
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Chicago – +3.7%
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Kansas City – +3.7%
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Columbus – +3.5%
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Philadelphia – +3.2%
These metros are benefiting from renewed demand, job growth, and stabilized inventory.
Bottom 5 Metros (YoY Rent Decline)
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Austin – –5.4%
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Denver – –3.6%
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Phoenix – –3.0%
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Dallas – –1.7%
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Atlanta – –1.6%
These Sun Belt markets are experiencing challenges from oversupply, with new deliveries outpacing renter demand and driving down rent growth.
Month-over-Month Movers
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Top Gainers: Chicago, Charlotte, Seattle, Boston
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Weak Performers: Phoenix, Miami, Austin, Portland
What’s Driving These Trends?
A few key factors are influencing the multifamily rent landscape:
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High interest rates are keeping more would-be buyers in the rental pool, supporting demand.
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Ongoing construction deliveries are weighing on rent growth in oversupplied metros, especially in the Sun Belt.
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Class A properties are slowly regaining traction as urban core demand returns post-pandemic.
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Affordability pressures are keeping demand steady in lower-cost RBN units.
Takeaway for Property Owners and Investors
The rental market in early 2025 is showing slow but steady growth, with notable stability in demand and occupancy. While gains aren’t uniform across regions, the fundamentals remain healthy in many metros.
Strategic leasing, market-by-market analysis, and thoughtful asset positioning will be key in navigating this next phase of the rental cycle.
If you own or manage properties, this is a great time to:
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Evaluate concessions and lease renewal strategies.
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Stay updated on local pipeline data to avoid surprises from incoming competition.
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Leverage the strength of renter-by-necessity markets for more consistent performance.
Final Thoughts
March 2025 paints a picture of a resilient rental market, still adjusting from the post-pandemic boom but avoiding sharp declines. With occupancy rates stable and rent growth persisting—albeit modestly—it’s clear that multifamily housing remains a reliable long-term investment in most markets.
For renters, affordability challenges continue in some areas, but increased supply may offer more choices in overbuilt regions. For owners, the message is clear: adapt, localize your strategy, and stay agile as the market continues to evolve.