A record oversupply of storage facilities in the post-pandemic period continues to weigh on the U.S. self-storage sector, which is in the midst of an ongoing slowdown, according to a report from Yardi Matrix.

The market intelligence firm found that demand for domestic migration and home sales — two of the main drivers of storage use — remains in a three-year slump. Now, renewed inflation poses another threat to the normalization of storage demand.

The industry’s fundamentals weakened in August and early September due to inflation issues, slow home sales and an increase in new self-storage units being delivered. Improvement in the near term will depend on declining new supply.

Advertisement

Advertised rates across the country declined 1.9% year over year, with the national average rate dropping to $16.39 per square foot. That was after rate declines in June and July. The majority of Yardi Matrix’s top 30 metropolitan areas recorded a larger year-over-year rate decline in August than in July, which may be a sign of an overall industry slowdown.

Only four top metros saw even a minor annual increase in rates for non-climate-controlled (NCC) units. They included Indianapolis, Minneapolis, Salt Lake City and New York City. And only Austin, Texas, and San Francisco saw rates rise for climate-controlled (CC) units.

Austin was unique among most cities in the report because it boasted positive annual rent growth and a considerable amount of newly constructed storage facilities. Improving affordability and stronger housing turnover appear to be supporting demand, with Austin-area home sales up 4.8% during the first half of 2026. Still, rising recent deliveries and August’s rate decline may show Austin’s market is slowing.

Many Sun Belt metros, which have been among the top locations for in-country migration in recent years, are still seeing the completion of new storage facilities despite a general slowing of the national development pipeline. That has led to rate declines in cities such as Tampa, Fla., which led the country with CC rates falling nearly 6%, followed by San Diego, where CC rates fell to the 5% range.

Charlotte, N.C., and Atlanta rounded out the top four cities with the greatest percentage of rate drops in CC storage facilities. The city with the fifth-highest percentage rate drop was Denver, the only non-Sun Belt city among the top eight metros with the greatest percentage decrease in CC rates. Las Vegas and Charlotte were among the cities with the greatest rate loss for NCC facilities.

Yardi Matrix writes that while it appears occupancy has stabilized, revenue growth remains pressured by the historically wide gap between in-place (the actual amount current tenants pay) and street rates (the standard asking prices quoted to new customers).

“Contributions from existing customer rate increases should also diminish as move-in and move-out activity normalizes,” states the report. “Despite these challenges, the sector remains favored by large investors, while transaction activity and pricing have continued their gradual recovery in 2026.”