Multifamily in Motion: Where the Market Stands and Where It’s Headed

Denver Hollingsworth

May 2, 2025

After a turbulent few years shaped by pandemic aftershocks, surging supply, and economic uncertainty, the multifamily market in 2025 has entered a new phase—one of recalibration, opportunity, and slow but steady momentum.

But make no mistake: we’re not back to “normal.” This isn’t 2019. It’s a new era with new dynamics, new resident expectations, and new opportunities for owners and operators willing to adapt.

Let’s break it down.


Where We Are Now: A Market in Transition

1. Supply Surge Peaking: The U.S. multifamily sector is at the tail end of a historic construction wave. Over 950,000 units are under construction, and 2025 alone is expected to deliver more than 500,000 new units—the most since the 1980s.

Much of this supply is concentrated in Sun Belt markets like Austin, Atlanta, Phoenix, Orlando, and Charlotte, which are also seeing the steepest rent declines. In contrast, older urban centers like New York City, Chicago, and Philadelphia have seen more modest rent growth, benefiting from limited new inventory and strong demand.

2. Demand Is Rebounding: Here’s the good news: demand is surging. Q1 2025 marked one of the best first quarters for apartment absorption in over two decades. Wage growth has now outpaced rent growth for 27 consecutive months, and more young adults are leaving the nest, re-entering the rental market.

This strong demand is helping offset the impacts of new supply—particularly in markets where lease-ups are starting to stabilize.

3. Rent Growth: Tepid but Ticking Up: National rent growth is now sitting at 1.1% YoY—not flashy, but an improvement from the near-flat performance of late 2023. Class A assets are leading the rebound at 2.2% YoY, while Class C assets remain under pressure due to affordability challenges and competition from higher-tier properties offering deep concessions.


What’s Driving Change in 2025?

  • Oversupply fatigue: Developers are pulling back. Multifamily starts are down 40% from their 2022 peak, and completions are expected to decline in 2026 and bottom out in 2027, creating a tighter supply environment in the next 18–24 months.
  • Tech transformation: Operators are embracing centralization, automation, and AI-powered leasing tools to reduce overhead and improve resident service. Connectivity and tech-enabled amenities are no longer a bonus—they’re essential infrastructure.
  • Consolidation of expenses: Insurance, taxes, and labor costs remain high. Owners are aggressively pursuing operational efficiency and exploring revenue enhancements like bulk internet and smart home packages to protect margins.

Where We’re Headed

1. Rent Recovery Is Likely—but Not Universal: As supply slows and absorption stays strong, rents will continue their gradual recovery—especially in markets where construction has tapered off. But oversupplied metros may not stabilize until late 2025 or early 2026.

2. Centralization Will Go Mainstream From leasing to maintenance, operators are moving away from on-site roles and toward centralized models that cut costs and boost consistency. 80% of third-party managers now report active centralization efforts—up from just 38% three years ago.

3. Technology Becomes a Differentiator: Residents are choosing communities with “move-in ready” Wi-Fi, smart access, and flexible amenities. Operators offering seamless, tech-forward experiences—powered by platforms like Onboard—are winning leases, reducing churn, and improving NOI.

4. A New Wave of Revenue Strategy: Owners are more focused than ever on monetizing the services residents already use, from bulk internet and TV packages to smart home solutions. These strategies are becoming standard in new developments and are increasingly being retrofitted into existing communities.


Final Thought: Now Is the Time to Get Strategic

2025 is not a year for playing defense. It’s a year for resetting expectations, optimizing operations, and investing in long-term differentiators—especially technology and connectivity.

As the dust settles on the supply wave and economic volatility, the owners and operators who move now to future-proof their portfolios will be best positioned to capitalize on the next upcycle.

The multifamily market may be in motion—but for those with a clear strategy, it’s moving in the right direction.

About the Author

Denver Hollingsworth

Former marketing lead at Comcast, with a decade of of marketing and communications experience in MDU/telecom. Currently serves as Vice President of Marketing at Onboard.