First quarter demand hits record as warmer markets see rent growth declines

The U.S. apartment market registered its highest first-quarter demand ever. According to RealPage, there were more than 138,000 market-rate units absorbed from January to March 2025. Annual demand was at nearly 708,000 units, and annual supply was at more than 576,000 units. Meanwhile, quarterly supply was at more than 116,000 units.

Occupancy improved 1.2% and sits at 95.2%, the highest since October 2022.

During Q1, rent growth was witnessed away from the coasts. Kansas City topped the list with a 5% annual effective rent change. Chicago followed closely behind at 4.8%, and Pittsburgh was at 4.1% rent growth. Cincinnati, Columbus, Ohio, Detroit and Milwaukee were also spotted on the list of top rent growth markets.

Markets that typically experienced rent growth several years ago are now among the top markets with the most decline. Austin, Texas, saw rents decline 6.4%. Phoenix and Denver also had rents decline at least 4% annually. Other Texas, Florida and Sun Belt cities are also on the list. Some of the rent cuts can be attributed to markets with high supply such as Austin and Phoenix.