Yardi Matrix: U.S. Multifamily Enters 2025 in Good Shape

(Image courtesy of Yardi Matrix; Breakout image courtesy of Josh Hild/pexels.com)

Yardi Matrix, Santa Barbara, Calif., said the multifamily market is entering 2025 in good shape, after strong demand in many markets.

Overall, it expects multifamily advertised rents to increase moderately in 2025, by 1.5% nationally. Some regions will fare better than others—with metros in the Northeast and Midwest poised to lead and Sun Belt rentals possibly dragged down by continued delivery.

In comparison, rents increased by just 1% in 2024 (specifically through month-end November).

Many of the conditions that drove rental demand through the year will continue into 2025–including Americans who may otherwise buy affected by interest rates and general costs of homeownership.

There were 550,000 units that came online in 2024, a record. Yardi Matrix anticipates 508,000 multifamily deliveries in 2025.

Tepid starts over the last couple years will hamper deliveries in 2026 and 2027, setting the stage for rent growth in 2027 and 2028.

Multifamily sales through October are virtually flat through 2023, and transactions are likely to stay slow amid a bevvy of economic concerns, including interest rates.

While multifamily distress remains low, the special servicing rate has increased–Yardi Matrix anticipates rising delinquencies in 2025.

Debt availability has improved, but varies across lender type.