While apartment asking rents rose in a few Midwest and East Coast cities in October, rents contracted in most major U.S. metros, with national averages remaining flat compared to last year. According to a new report from Redfin, multifamily asking rents grew just 0.2% overall, as markets across the Sun Belt cooled and cities in the Mid-Atlantic and Great Lakes posted solid gains.

Asking rents per square foot fell for the 18th consecutive month, as a surge in new apartment construction, particularly in oversupplied markets, has led owners to offer concessions and lower rents.

Redfin senior economist Sheharyar Bokhari linked the drop in rents in cities like Tampa and Jacksonville to the record pace of new apartment completions, creating a glut of inventory. “Construction is slowing, but we’ll continue to see a wave of new apartments coming to market in the months ahead, which will be good news for renters seeking more affordable options in 2025,” Bokhari said.

Virginia Beach saw the highest growth, with asking rents up 11.7% from last year, followed by Washington, D.C. at 11.1%, Cleveland (9.8%), Chicago (8.8%) and Baltimore (8.5%). In contrast, rents fell most sharply in Raleigh (-8.8%), Tampa (-8.5%), Jacksonville (-8.4%) and Austin (-8.2%). Los Angeles, San Diego, and San Francisco also saw declines in asking rents between 6.6% and 2.5% compared to October 2023.

Rising rents in certain markets, combined with recent federal rate cuts, are reshaping multifamily investment dynamics. As borrowing costs drop, investor interest is returning, particularly for stabilized multifamily properties in high-growth markets where cap rates align with lower financing costs. The easing rate environment is expected to ease pressure on borrowers, opening up refinancing opportunities and boosting deal flow. However, oversupplied markets face challenges as concessions and lower rents weigh on returns.

Nonetheless, analysts predict that the combination of rent growth, easing financing conditions, and renewed investor confidence will drive a modest rebound in multifamily investment activity in the coming months.