Apartment investors that have been drawn to booming markets like Austin and Tampa are beginning to see signs of a turnaround as the oversupply of new apartments—and the resulting decline in rents—starts to stabilize. According to a new report by CBRE, urban markets in the Sun Belt experiencing significant renter growth and apartment construction are showing early signs of rebalancing, with occupancy rates and absorption levels starting to level off.

Nearly 70% of the total apartment supply in these rapidly growing areas, and Salt Lake City, has experienced negative rent growth since the third quarter of 2023, CBRE found. However, demand for housing in these areas continues to surpass the rate of new apartment construction, leading to decreased vacancy rates and a potential for positive rent growth.

"Nearly all high-supply markets with negative rent growth are expected to see positive rent growth and stable vacancy rates by mid-2025," the report stated. "The exception is Austin, where a sharp increase in new suburban supply is likely to sustain negative rent growth until Q3 2025."