In its Q3 2025 report, Cushman & Wakefield highlights that the multifamily sector remains remarkably resilient despite ongoing macroeconomic uncertainty. Renters continue to drive strong demand, maintaining record-level absorption and supporting stable occupancy even as rent growth moderates and construction slows sharply.
Demand remains durable: The multifamily market recorded over 102,000 net units absorbed in Q3 2025, marking the third consecutive quarter surpassing 100,000 move-ins. While quarterly absorption was 12% below last year’s peak, year-to-date demand remains just 4% below the near-record pace of 2024. Renters are displaying notable confidence amid economic headwinds, keeping occupancy healthy as renting remains a financially accessible alternative to homeownership.
Owners prioritize stability over growth: Facing economic uncertainty and weaker job growth, many operators are emphasizing occupancy retention over rent increases. Although overall vacancy declined for a third straight quarter to 9.02%, rent growth softened further—rising just 1.5% year-over-year, down from 2.2% earlier in 2025. Renewal rents have been more stable, averaging 3–4%, while new leases reflect greater weakness as owners compete with generous concessions.
Converging vacancy rates tell mixed stories: Cushman & Wakefield notes a divergence between overall and stabilized vacancy. New properties are leasing up quickly, driving strong absorption and pulling total vacancy down, while existing assets face modest occupancy erosion. Markets such as Charleston, Durham, Boise, Palm Beach, and Austin are leading in occupancy gains—indicating robust renter demand and rapid absorption of new supply. Meanwhile, Omaha, Stamford, and Ventura saw rising vacancy amid slower lease-up activity.
Rent growth diverges by region: While national rent growth weakened overall, the Bay Area led the nation—with San Francisco up 7.8% and San Jose up 5.2% year-over-year, bolstered by tech sector investment, AI-driven economic activity, and improved urban conditions. The Midwest (3.2%) and Northeast (3.4%) also outperformed, led by Chicago (4.2%) and New York (3.7%), while the South lagged at just 0.6%, constrained by abundant new supply and slower absorption.
The construction pipeline is drying up: The report emphasizes that the supply wave has crested. Q3 saw 109,000 new deliveries, down 27% year-over-year, and the total pipeline has fallen to 450,000 units under construction—the lowest in a decade. Construction starts have dropped to levels last seen in 2012, with most major metros showing declines. Only 11 markets recorded any increase in pipeline activity, with New York, Dallas–Fort Worth, Austin, and Houston seeing the largest pullbacks.
Get access to Cushman & Wakefield’s Q3 report here.
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