U.S. apartment rents rise 0.3% in Q3 as annual completions fall 46% from peak

U.S. apartment rents rose 0.3% quarter over quarter in the third quarter, the first third-quarter increase in four years, according to Yardi Matrix figures reported by Bisnow. Rents are up 1.4% across the first three quarters.

The supply wave is receding. Developers finished 318,000 units in the year ending in the third quarter, a 46% drop from the more than 588,000-unit peak of late 2024. The demand-supply gap narrowed to 13,000 units, the fewest in more than a decade, according to a third-quarter RealPage report Bisnow cited.

The recovery is uneven by market. The strongest year-over-year fundamentals came in gateway and Midwest metros, led by San Francisco at nearly 10% rent growth, with New York City, Chicago, Kansas City and Detroit hovering around 5%. Sun Belt markets are still absorbing heavier supply but are "becoming less negative," according to the report: Miami, Atlanta and Los Angeles sit below 1%, while Denver, Houston and Austin are nearing negative 3%. On the report's approximations, roughly a dozen percentage points separate the best and weakest of the metros it names.

Yardi Matrix's read on the quarter is conditional. "Fundamentals may be stabilizing after several years of supply-driven weakness," the report said, pointing to improving market breadth, slowing supply growth and resilient occupancy as evidence multifamily is "entering the fourth quarter on firmer footing." Rents holding near current levels through the year could amount to "meaningful improvement from recent years," the firm said.

The cost of capital sits outside those leasing trends. The 10-year Treasury yield climbed above 5%, its highest level since 2022, according to the report. Yardi Matrix said economic volatility could push refinancing costs higher and slow transaction activity. That implies a market where improving rents do not necessarily translate into more deals.