Nationwide rents declined again in January for the sixth month in a row, according to the February report from Apartment List.
Rents fell 0.2% in January a month that typically marks the “bottom” of the rental market each year, before rents start to rise in the spring. Rents declined less in January than they did in December, indicating a slight pickup in moving activity even as the market remains in its off-season.
But as it stands now, the national median rent is $1,370, its lowest point in nearly three years. And in January, the typical apartment was “on market” for 37 days before renting, an all-time high.
“Year-over-year growth also remains negative at -0.5 percent, but is slowly inching back toward positive territory,” write the Apartment List Research Team in the report. “63 of the nation’s 100 largest cities saw rents fall in January, but on a year-over-year basis, rent growth was positive for 52 of these cities, as more individual markets gradually return to positive rent growth.”
Vacancy index hits 6.9%, a new peak
“Our national vacancy index ticked up to 6.9 percent in January, the highest reading in the history of that monthly data series, which goes back to the start of 2017,” the research team writes.
The rising vacancy rate in recent years is largely attributable to an influx of new multifamily inventory hitting the market. 2023 marked a 30-year high for new multifamily units completing construction, and 2024 saw new completions increase even further. However there are more new units coming in 2025 as there are still 800,000 new multifamily units under construction.
List-to-Lease time hits a new high
“The median time on market of 37 days in January is the highest reading that we’ve seen for this metric in any month going back to the start of 2019, when the data series begins,” the research team says.
The influx of new supply is resulting not only in a growing number of vacant units, but also in an increase in the length of time those units remain unoccupied.
Conclusion
“Demand for rentals going forward remains a bit more uncertain, and will likely hinge on broader macroeconomic conditions. Currently, it appears that 2025 is set to be another soft year for the rental market, though not as soft as 2024,” the report says.