A widening regional gap is emerging in multifamily rent trends, as Midwestern and some coastal markets are outperforming while Sunbelt locales, especially those on Florida’s Gulf Coast, are underperforming. This divergence is not apparent at the national level but underlines the importance of local dynamics, including the supply pipeline, vacancy shocks and recovery patterns that are driving rental market trajectories.
National multifamily rent trends showed a clear pattern of moderation at mid-year, falling 0.23% to $1,713 in August and signaling a market that is softening beyond usual seasonal downturns. Rents were flat or negative for the second consecutive month, and the national average rent declined by more than 20 basis points for the first time since January, according to CoStar Group’s multifamily rent trends report.
Rents declined in all regions in August, marking a departure from July when the Midwest and Northeast still showed modest rent gains, said the report. The pullback was most pronounced in the West, where rents fell 0.5% month over month, and the South, where rents fell 0.4%. Midwest rents fell 0.2% and Northeast rents fell 0.1% on a month-over-month basis, but for the year, rents were up 2.5% in the Midwest and 2.2% in the Northeast.
Drilling down into metro-level performance reveals greater variability, with coastal and gateway markets, which have seen limited new supply, showing a greater concentration of rent gains. Brookline, Massachusetts, continued to show a sharp upward trajectory, with rent increases of 6.7% in May and 6.5% in June, indicating strong regional demand. Meanwhile, Hollywood, Florida’s 6.1% rent growth in June demonstrates that the state’s Atlantic side is not suffering the same weak or negative rent growth many Gulf Coast cities are seeing. Chicago’s multifamily rents have also surged, up 4.6% in June, propelled by limited new supply and a healthy local economy, as reflected by both year-over-year and quarter-over-quarter data.
Other notable gainers include Brooklyn, New York, where rents grew 4% in June, and Columbus, Ohio, where rents grew 3.7%. The Midwest region broadly demonstrates strength with cities like Omaha, Lexington and Cincinnati all posting annual rent growth above 6%, and Cleveland, Madison and Wichita showing solid momentum. This outperformance is mirrored by particularly resilient occupancy rates as Northern New Jersey, New York, and West Michigan all topped 97%.
On the other hand, Florida’s Gulf Coast markets have shifted from pandemic-era hot spots to relative laggards. Cape Coral rents were down 6.3%, Naples rents were down 3.2%, Fort Myers rents were down 3%, and Sarasota rents declined 2.7%. This is due to a surge in vacancy following hurricane-related disruptions, coupled with ongoing supply outpacing demand. Denver was also among the hardest-hit markets, with rents falling 2.4% there.
The data also show persistent high vacancy along with continued use of incentives in markets with heavy new deliveries. Vacancy in Austin and San Antonio continued to exceed 15% vacancy, which is putting downward pressure on rents and prolonging the use of concessions.
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