Although the broader rental market showed signs of cooling, private condo leasing jumped 24% in Q3 2025 compared to a year earlier, signaling a clear rebound in tenant activity. This momentum stood out against a mixed backdrop, where U.S. multifamily net absorption reached 137,735 units, yet remained 24% lower year over year.
Private condo leasing surged 24% in Q3 2025, rebounding as multifamily absorption lagged 24% year-over-year nationwide.
Annualized absorption for the year ending Q3 tallied 637,000 units, while completions slowed, narrowing the demand-supply gap and helping keep occupancy steadier than expected. Over that period, absorption was nearly double the 10-year annual average.
Average effective asking rents slipped 0.3% between July and September, the first Q3 decline since 2009, even as year-over-year growth held at 2.0% and the national average reached $1,880.
Supply-heavy areas in the South and West cut rents and increased concessions, damping growth. By contrast, tech-driven metros such as San Francisco, New York, and San Jose posted gains.
Private condos benefited from that uneven backdrop, drawing renters seeking flexibility, amenities, and a good deal. Nearly 22% of apartments offered concessions in Q3, averaging 6.2%, which supported occupancy that, while down 30 basis points to 95.4%, stayed relatively firm.
With the highest resale inventory since 2019 and mortgage rates elevated, many households stayed put or chose leases over purchases, a practical choice when incentives sweeten the math. The trend mirrors luxury housing’s resilience seen earlier in 2025, when lower interest rates made premium properties more accessible despite economic uncertainty.
Construction trends also played a role. More than 474,800 multifamily units delivered over the past year, including 105,500 in Q3, yet new starts declined for a third straight quarter after peaking in late 2024.
Slower future inventory growth, paired with steady demand, helped stabilize conditions for landlords. By 2026, projected annual supply growth is expected to slow to approximately 260,000 units, the lowest since 2014, potentially tightening vacancy if demand holds.
It did not erase regional pain, though, with Denver and Austin nearing 8% rent cuts, and Phoenix and San Antonio closer to 5%.
Elsewhere, the Midwest and Northeast showed relative strength due to softer supply additions, while tourism-dependent markets like Las Vegas, Orlando, and San Diego lagged as discretionary travel cooled.
Several Florida metros logged declines up to 6.2% amid oversupply and affordability pressure.
