Multifamily market 'muddles through the uncertainty' in Q2 2025

Multifamily construction starts have declined significantly from its peak in 2022, but a large under-construction pipeline will still deliver around 536,000 units by the end of the year, according to the Matrix Research Bulletin Multifamily Supply Forecast – Q2 2025.

Multifamily Starts and Completions

New construction starts saw a 40% drop in 2024 compared to their 2022 peak, falling to roughly 410,000 units. This decline is expected to lead to a further reduction in new supply by 2026, projected at around 422,000 units.

"Compared to last quarter’s forecast, the Q2 update increased forecast completions for 2025 through 2027 by roughly 2%," the report states.

Multifamily Rent Increases

Despite substantial new supply, multifamily fundamentals proved resilient in April, as the average national rent across the U.S. rose and occupancy rates remained relatively stable.

According to the Matrix Multifamily National Report – April 2025, the average U.S. advertised rent increased $5 to $1,736, while year-over-year growth fell 10 basis points to just under one percent.

The occupancy rate across the country in March was 94.4%, the lowest rate recorded since November 2013.

National Average Rents

"While multifamily market fundamentals are healthy, the economic uncertainty caused by tariffs could challenge the market," the report states. "Weaker economic growth could offset the supply slowdown by reducing multifamily demand, which could delay rent growth recovery."