As we cross the halfway point of 2025, the multifamily market is showing a clear shift away from a renter-friendly environment and back into the hands of landlords. Over the past couple of years, renters benefited from increased supply, rent concessions, and lower prices in some regions. But that cycle is turning.
According to CoStar, the national vacancy rate is dropping thanks to strong demand, a shrinking construction pipeline, and slowing rent concessions. CBRE reports similar findings: fewer new developments are coming online, renters are filling existing units, and annual rent growth is accelerating.
In short, rental demand is catching up with supply, so the leverage is returning to landlords.
The Top 10 Multifamily Cities in 2025
CoStar’s market analytics team recently developed a momentum index that ranks the most improved cities based on key indicators:
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Rent growth acceleration
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Declining vacancy rates
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A slowdown in under-construction units
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Net absorption as a percentage of total inventory
Here are the top 10 multifamily markets in 2025:
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Jacksonville, FL – Driven by nearly 9% population growth since 2020, Jacksonville’s demand is surging. Luxury apartments dominate absorption, but affordable neighborhoods still offer opportunities.
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Atlanta, GA – With strong job creation and affordability compared to coastal markets, Atlanta continues to attract renters. Half of new developments are offering concessions, making it an investor’s market to watch.
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Tampa, FL – Job growth in healthcare, logistics, and tourism has fueled population gains and rental demand, especially downtown.
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Raleigh, NC – A growing tech hub with strong in-migration and declining new construction, Raleigh offers a balanced mix of city and suburban options.
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San Francisco, CA – After years of renter leverage, the Bay Area is tightening again, led by AI companies moving in and a sharp drop in vacancy rates.
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Seattle, WA – Despite high rents, Seattle remains attractive due to strong job and wage growth. Luxury units account for the bulk of absorption.
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Minneapolis, MN – Suburban demand is booming as renters look for affordability and space, leading to rising rents and dropping vacancies.
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Orlando, FL – With job growth across tourism, healthcare, and logistics, Orlando’s luxury apartment absorption hit 90% of the total last year.
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San Jose, CA – Silicon Valley’s AI boom is fueling record absorption, with thousands of new units leased quickly despite high prices.
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Philadelphia, PA – Millennials are driving growth in this affordable urban market. Concessions remain common downtown, but suburban demand is steady.
The Bigger Picture: Why Multifamily is Gaining Strength
Both CoStar and CBRE agree: multifamily demand is resilient in 2025. Developers have added more apartments in the past few years than in any period since the 1970s, but with pipelines shrinking and absorption strong, the oversupply is fading.
Meanwhile, affordability challenges in the housing market are keeping more people renting. CBRE reports the average mortgage payment is now 35% higher than average rent, and in some major metros, owning a home costs two to three times more than renting. That affordability gap makes renting the default choice for many households—even higher earners.
How Renters Can Compete in a Landlord’s Market
As landlords regain leverage, renters will need to adjust. Here are a few strategies that work in tighter conditions:
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Act fast: Have your documents ready and respond quickly when you find the right property.
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Be flexible: Landlords may favor tenants willing to adjust move-in dates or lease terms.
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Look beyond the core: Suburban markets are often more affordable and have less competition.
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Time your search: Off-season moves (fall/winter) can mean less competition and better pricing.
My Take as an Investor
If you’re a real estate investor, this environment should get your attention. Rents are firming, vacancies are falling, and developers are finally pulling back on supply. That combination often signals strong returns for landlords over the next few years.
I always remind investors: markets move in cycles. The same oversupply that gave renters leverage in 2023 and 2024 is now burning off. Smart investors who study migration trends, job growth, and affordability metrics will be able to position themselves in the right cities before everyone else catches on.
The top 10 markets highlighted by CoStar are a great place to start your research. Jacksonville, Atlanta, and Raleigh may not get the same headlines as San Francisco or Seattle, but they’re showing powerful demand dynamics with room to run.
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