Austin and San Jose are emerging as the strongest performers in the latest U.S. Multifamily Momentum Index produced by Apartments.com and CoStar, highlighting where fundamentals are recovering fastest across the sector. The index is designed to capture year-over-year improvement in core performance metrics, rather than absolute levels, providing a view into which metros are gaining traction most quickly as the market works through a period of adjustment.
According to the index framework, rankings are based on changes in several indicators, including rent growth, vacancy trends, the relationship between demand and new supply, and shifts in the under-construction pipeline relative to existing inventory. By focusing on these moving pieces, the index identifies markets where supply pressures are easing or demand is reasserting itself, even if current rent levels remain below prior peaks.
CoStar notes that, alongside Austin and San Jose, other Northern California markets and a range of Sunbelt cities also place near the top of the momentum rankings. This pattern reflects the geographic breadth of the current recovery, while also underscoring that improvement is far from uniform across the country. Since the second quarter of 2025, the firm observes, multifamily performance has followed an uneven path, with some higher-ranked markets still registering annual rent declines despite their strong momentum scores.
Austin illustrates this dynamic. While the market sits near the top of the Multifamily Momentum Index, CoStar reports that rents there are still down on a year-over-year basis. However, the pace of those rent declines has moderated, indicating that pricing pressure is easing. At the same time, vacancy in Austin is moving lower, suggesting that demand is converging with, or beginning to outpace, the substantial new supply that has come online in recent years.
CoStar’s analysis also points to a range of supply-demand patterns across the index markets. In some locations, a rebound in demand is restoring a degree of pricing power to owners and operators, even if rent growth remains modest. In others, a slowdown in new construction activity is allowing fundamentals to stabilize as the pipeline becomes better aligned with existing inventory and current absorption levels. The firm further notes that in markets where development has long been constrained, entrenched supply limitations continue to shape performance and can dampen the pace of change tracked by the index.
Grant Montgomery, national director of U.S. multifamily analytics at CoStar Group, characterizes regional variation as a function of each market’s position in the supply-demand cycle. He notes that some areas are benefiting primarily from renewed demand, others from reduced construction, and still others from structural supply constraints that limit both downside and upside. Taken together, the latest Multifamily Momentum Index results suggest that the national recovery remains highly localized, with Austin, San Jose, Northern California, and select Sunbelt metros currently at the forefront of improving apartment fundamentals.
