A surge of new supply is driving up vacancies and pushing rents down in the multifamily housing market. The national median rent for apartments dropped 1% in November to $1,367, marking the fourth consecutive monthly decline. The multifamily vacancy rate remained at 7.2% in November after hitting a record high in October.

The slowdown in multifamily rents is more pronounced this year, with CoStar reporting the biggest monthly rent drops in 15 years. The primary reason is the increasing number of young adults living with family, reaching 32.5%. This demographic traditionally drives rental demand but is facing high costs and a tough job market.

Some markets are seeing rents decline faster due to local economic factors. Las Vegas is impacted by slower tourism, Boston by reduced biotech funding and foreign student enrollment, and Austin by continued multifamily construction. Nationally, renters are seeking more affordable markets like Cincinnati, Atlanta, and Kansas City.

Yardi reports increased interest in Midwest markets, with 11 of the top 30 cities for renter demand located in the region. While new supply is expected to decline through 2027, an under-construction pipeline led Yardi to revise its 2025 and 2026 supply estimates upward. Construction slowdowns in 2026 should stabilize the overall market somewhat.

Read more at CNBC: Apartment rents drop further, with vacancies at record high