The Multifamily Bear Case: This Week’s Data

Redfin’s Monthly Rent Report – Released January 2025

• The median asking rent fell 0.3% year over year in December to $1,594, the lowest since March 2022
• Rents were down 0.1% from a month earlier, and down 6.2% from the August 2022 high of $1,700.
• The median asking rent per square foot dropped 1.9% year over year in December to $1.78 and fell 0.1% month over month.
• Asking rents fell across all bedroom counts for the sixth consecutive month
• Asking rents have been falling because an influx of supply has left apartment owners with rising vacancies. Apartment completions surged 58.1% year over year to the highest level since 1974 in the third quarter—the most recent period for which data is available. As a result, the vacancy rate for buildings with five or more units rose to 8%, the highest since early 2021.

ApartmentAdvisor Monthly Rent Report – Released January 2025

• Rents fell 1.9% month-over-month and 3.8% over the last 3 months

Yardi Matrix’s Monthly Rent Report – Released January 2025

• Multifamily rents fell 0.20% and Single Family rents fell 0.30% month-over-month

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The average U.S. inflation rate since:

1930 = 3.1%
1940 = 3.7%
1950 = 3.5%
1960 = 3.7%
1970 = 3.9%
1980 = 3.2%
1990 = 2.7%
2000 = 2.5%

The future is never the same as the past, but the Fed’s 2.0% inflation target is a level we’ve never hit, other than the anomalous period in the 2010s following the Great Financial Crisis.

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The cap rates on single-family investment homes (which have not experienced the price declines of multifamily) are now trading below the 10-year treasury rate.