Yardi Matrix's Multifamily National Report for February highlights external factors, some tied to government policy, which are working against the industry – especially immigration and declining birth rates. And while it notes that "conditions are by no means dire," it observed that rent growth during the month was stagnant and over the year experienced a drop of 10 basis points.
"Population growth, a key element of multifamily demand, is slowing sharply in the U.S. due to immigration policy and the long-term decline in the birth rate," the report noted. It cited Census data showing that the U.S. population grew by 1.8 million to 341.8 million between July 2024 and July 2025. But that was the lowest annual rate since the pandemic and 0.2% below the annual growth rate since 2000. It was also a big drop from the previous 12 months, when the population grew by 3.2 million.
One reason for the population decline was a 54% drop in international immigration, from 2.7 million in 2023-2024 to 1.3 million in 2024-2025. Numbers were expected to fall still further due to enforcement and self-deporting, Yardi Matrix projected.
Another reason for concern was the continuing slide in the national birthrate last year. It hit the lowest rate on record at just 3.6 million or 1.06% of the population. The biggest gains were in Sunbelt states, although the rate of growth slowed in each state. The worst hit were Florida, Massachusetts, New Jersey, New York and Texas.
Domestic migration that benefited the Sunbelt and Mountain West states is slowing as well. In 2022 and 2023, one million people moved from one state to another. But in 2025, for the second year in a row, the number plunged to 550,000 or 0.15% of the population.
North Carolina, Texas, South Carolina, Tennessee and Arizona saw an increase in immigration in 2024-2025, but it was still below the average of the previous three years. Colorado had its first year of out-migration in 20 years (-0.2%).
"Multifamily operators could be forced to plan for a slower-demand world," the report cautioned.
As for rents, the report said multifamily rents averaged $1,740, falling 10 basis points year-over-year. Absorption began to slow in the second half of 2025. "Occupancy rates are negative year-over-year in 28 of the top 30 Matrix markets," the report stated.
Part of the reason is oversupply, especially in the Sunbelt.
"A sizable volume of units remain in lease-up and will take time to absorb," Yardi Matrix commented.
Other factors include weak job growth, escalating political tensions, especially over the military action in Iran, the risk of oil supply disruptions, rising prices and the impact of tariffs that could intensify inflation or delay short-term rate cuts, with Yardi adding "all as consumer confidence is weak and renter budgets are tight."
On the positive side, the report noted that lease renewals are strong and renewal rates are moving in the right direction. It said core markets like San Francisco and Chicago have bounced back and Sunbelt markets still have long-term growth prospects. Equity and debt capital are available, and there are opportunities for core properties and value-add assets with mortgages taken out from 2020 to 2022 that need to be restructured.
Nevertheless, the report warned that the outlook for spring is soft with the possibility that rent growth in 2026 could again be weak.
In February, the highest rent growth was recorded in New York (4.2% year-over-year), San Francisco (3.6%), Chicago (3.5%), the Twin Cities (2.3%) and Kansas City (2.0%). But it was negative in many high-supply metros, including Austin (-5.2%), Phoenix (-3.6%), Denver and Tampa (both -3.2%) and Charlotte (-1.9%).
Occupancy held steady nationally at 94.3% in February but dropped 0.4% year-over-year. Modest increases were noted in Atlanta and San Francisco, alone among the 30 metros in the study. Nearly half of them saw occupancy fall by 0.5% or more, along with negative rent growth.
The most notable rent growth occurred in gateway markets, particularly New York, though lifestyle renters there were also affected. Austin had the lowest rent growth in both segments. Midwest markets were relatively stable.
Yardi Matrix also pointed to significant pushback from industry groups against proposed federal legislation that would bar institutional investors owning 350 or more homes from buying most single-family homes or require them to sell the properties within 7 years. The report said the bill creates onerous conditions that would make the SFR-BTR segment unattractive for many institutions.
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