Remember when landlords could sneeze and raise rent by $200? Those days are officially over. Apartment rents just hit their lowest January level since 2022, vacancy rates are at record highs, and units are sitting empty longer than that treadmill you bought during the pandemic. If you're a multifamily investor watching Austin rents plummet 6.3%, pour one out for your projected NOI.

Story: Apartment rents just hit their lowest January level since 2022, with the national median rent clocking in at $1,353, down 1.4% year-over-year and a whopping 6.2% below the summer 2022 peak. The vacancy rate reached a record high of 7.3%, and units are sitting empty for an average of 41 days before getting leased (four days longer than last year). Austin, Texas, is leading the race to the bottom with rents down 6.3%, followed by New Orleans, San Antonio, Tucson, and Denver. Meanwhile, Virginia Beach is bucking the trend with 5% growth, joined by San Jose, San Francisco, Chicago, and Providence. The culprit? A tsunami of new apartment construction is colliding with weaker demand from a tighter job market and slower household formation.

So What? For investors and property managers, this is the market equivalent of your favorite restaurant suddenly having open tables on Saturday night… Something's shifted. If you're holding properties in oversupplied markets (looking at you, Sun Belt), you're likely offering concessions and watching your NOI get squeezed. But this also creates opportunity: softer rents mean better acquisition pricing for long-term plays, and properties in tight markets (hello, Northeast and West Coast) are still commanding premium rents. The 41-day lease-up time means you need sharper marketing, better amenities, and possibly deeper pockets to weather longer vacancy periods. Property managers should be stress-testing their budgets for lower rent growth and higher concession costs.

What’s Next? The construction wave is cresting, but not over; supply is still working through the pipeline into 2026. Keep an eye on the labor market and household formation data, they are the leading indicators of whether this slide continues or stabilizes. Markets like Austin and Denver might see further softening before things level out, while undersupplied coastal markets could stay resilient. Watch for landlords getting creative with concessions (hello, free months and upgraded finishes) and potentially some distress opportunities as overleveraged owners face refinancing challenges. The NAHB estimates we need 1.2 million more units to close the national housing shortage, so this oversupply situation should eventually self-correct, but "eventually" is doing a lot of heavy lifting in that sentence.

Source: CNBC

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