Rental markets spent last year consistently swinging in tenants’ favor as the nationwide vacancy rate climbed from year-before levels, lowering asking rents on an aggregate basis.
The 50 largest U.S. metros observed an average rental vacancy rate of 7.6% in 2025, according to the U.S. Census Bureau, up from 7.2% in 2024, driving what Realtor.com described in its monthly rental report for January as a “surge in availability” of units.
Following suit, national median asking rents in January posted their 29th consecutive month of year-over-year declines, slipping 1.5% lower to $1,672 across all apartment sizes. That is $85, or 4.8%, lower than peak levels in August 2022 but 15.2% higher than January 2020.
Stagnating rent growth and climbing vacancies are not expected to slow a steady post-pandemic recovery in the multifamily sector, with Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) forecasting a repeat of 2025’s strong multifamily lending volumes this year.
After total multifamily volumes topped $480 billion in 2021 and 2022, higher financing costs brought on by Federal Reserve interest rate hikes shaved production by nearly half to $246 billion in 2023 and $289 billion in 2024, according to MBA data.
The association’s projections from January show that the multifamily market grew by almost 15% to exceed $330 billion in 2025, and it is projected to grow by another 20% to around $400 billion in 2026.
According to Realtor.com’s Tuesday report analyzing the 50 largest U.S. metros, 22 were renter-friendly last month, 22 were considered balanced, and just six metros with vacancy rates below 5% were considered more friendly to landlords.
“This shift doesn’t just mean lower prices; it means that renters today have more options and more bargaining power,” commented Danielle Hale, chief economist at Realtor.com, in the analysis. All unit sizes saw yearly rent declines in January.
Larger, two-bedroom units observed the largest yearly price decline, sliding 1.7% last month, but they remain the most inflated from pre-pandemic levels, still up 17% from January 2020. Studio apartments are 10% higher over than past six years, while one-bedroom units are up 13.4%.
The steepest annual rent declines were concentrated in markets where vacancy rates have either been consistently high or deteriorated notably over the course of last year.
In Austin, Texas, for example, the median asking rent was $1,358 in January, down 7.3% from a year ago. The rental vacancy rate, meanwhile, climbed from 8.2% in 2024 to 13.8% in 2025.
Nashville, Tenn., saw median rents drop 4.5% in January on vacancy rates that rose from 8.5% in 2024 to 11.1% in 2025. Rents of $1,147 in Birmingham, Ala., were down 4.7% over the year. That city’s vacancy rate of 14.9% in 2024 only dipped slightly to 14.3% in 2025.
Buffalo, N.Y., and Milwaukee were outliers to the national trend. Buffalo experienced yearly rent growth of 1.7% despite the vacancy rate rising from 10.4% to 12.5%. Milwaukee’s vacancy rate climbed from 4.9% to 10.8%, yet it posted 4.9% annual rent growth.
