**Yardi Matrix Reports Sluggish May Multifamily Metrics**
Yardi Matrix’s May 2025 National Multifamily Report highlights modest growth across the sector, with rents increasing by 1% year-over-year — signaling what the report describes as a “steady if unspectacular growth pattern.” However, nationwide occupancy dropped slightly to 94.4%, the lowest level seen in over a decade.
The report attributes this dip to a continued wave of new apartment deliveries. Despite the increase in available units, demand for rental housing remains strong, helping to keep rent growth above water.
“While there has been an influx of new apartment completions, particularly in 2024, the demand for rental housing is also rising,” said Doug Ressler, Manager of Business Intelligence at Yardi Matrix. “The increased demand is helping to stabilize and push rent growth back into positive territory.”
**Regional Performance Varies Widely**
As is often the case in commercial real estate, performance varies significantly by geographic location. Cities in the Northeast and Midwest — particularly gateway and secondary metros — reported the highest rent growth. According to Ressler, this is largely due to limited new development and robust demand in those areas. Conversely, Sunbelt regions facing an oversupply of new construction are still experiencing negative rent growth.
“These Northeast and Midwest cities tend to offer more stable and diverse economies, as well as more affordable living costs,” Ressler explained.
He also noted that markets home to large research universities and expanding biotech sectors face “above-average downside risk.” Metros such as Boston, San Francisco, Raleigh-Durham, Seattle, and San Diego are being closely monitored due to risks related to cap-rate compression and sustained higher Treasury yields, which remain around 4.5%.
**Looking Ahead**
As for the broader outlook, Yardi Matrix projects national rent growth to reach 1.6% in 2025 and 1.2% in 2026, before returning to a longer-term average range of 3% to 4%. Occupancy is forecast to remain relatively stable: 94.6% in 2025, 94.7% in 2026, and 94.6% in 2027.
While the impacts of federal economic policies may take time to materialize, the report expresses cautious optimism moving forward. Ressler noted that the summer leasing season is taking place amid mixed economic indicators. Although payrolls, consumer spending, and household balance sheets remain generally strong, softer consumer sentiment and a slowdown in new industrial orders may signal slower momentum ahead.
He also acknowledged that local economic downturns — particularly those involving job losses or business closures — could affect rental demand, rent growth, and occupancy levels.
“Overall, the balance of risk has modestly tilted toward slower growth,” Ressler concluded. “But a recession is not our base case.”
