Apartment rent growth continued to slow in October with moderate gains amid cooling demand throughout the housing sector.

That’s according to Yardi Matrix, which reported that U.S. multifamily asking rents grew by $3 from September to October, reaching an average figure of $1,727. Year-over-year growth dropped by 130 basis points to 8.2%, plunging from its peak of 15.3% in the first quarter to its lowest point since summer 2021.

The halcyon days of annualized rent growth above 20% are well in the past, with only five of the top 30 rental markets tracked by Yardi recording double-digit percentage gains in October. These cities were led by Indianapolis (11.8% year-over-year rent growth), followed by Orlando (11.6%), Miami (11.4%), San Jose (10.6%) and Dallas (10.5%). Weakening absorption bears watching, however, with occupancy rates for stabilized properties turning negative on a yearly basis in 24 of 30 metros.

Still, for now, rent growth remains at a healthy level compared to historic norms. Twenty-five of the top 30 metros logged yearly rent growth of at least 5%, and while the national occupancy rate has fallen by 50 basis points over the past 12 months, the current level of 95.5% still exceeds the long-term average.

The multifamily housing industry is currently keen on monitoring further interest rate growth, with many speculating about when large-scale impacts (as well as the magnitude of these impacts) will be felt across the sector. The current mortgage rate environment presents a double-edged sword for the apartment segment. High rates inevitably push potential homebuyers to the sidelines, keeping many of them in the renter pool. But with the cost of funding significantly raised (and still rising), both new construction and sales of multifamily assets are likely to decrease.