Economic pressures impacting U.S. multifamily market, Yardi Matrix reports

Demand falters as inflation and workforce reductions ramp up pressure on consumers

SANTA BARBARA, Calif., Nov. 11, 2025 – New Yardi® Matrix research shows that the U.S. average advertised asking rent fell by $4 to $1,743 in October 2025, the third consecutive monthly decrease, as inflation and a weakening labor market take their toll on multifamily demand.

Labor market strains are a key factor affecting the multifamily sector. Only about 32% of the expected new jobs materialized in September, while several major employers announced layoffs and buyouts reduced the federal government workforce. The growing impact of inflation, which has been above 2% throughout 2025, on households adds to the steady drop in consumer sentiment.

Absorption rates fell sharply in key Midwest metros including Detroit, Minnesota’s Twin Cities and Indianapolis, and in Sun Belt markets such as Orlando, Fla., Nashville, Tenn., and Miami. Year-over-year rent growth in October remained unchanged at 0.5%.

Yardi Matrix analysts state that while declining rent growth indicates that “the sector may be entering a period of softness,” the sharp drop in starts since 2023 has given high-supply Sun Belt and Western markets time to absorb units in lease-up. And “it would be jumping the gun to read too much into one quarter of data,” as tariffs, deglobalization, deregulation, rising stock prices and the prospect of productivity gains from artificial intelligence continue to play out in the economy.

See the latest insights into supply, demand, demographics, employment and other factors in the October 2025 edition of the Yardi Matrix National Multifamily Report.

Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, single-family rentals/ build to rent, affordable housing, student housing, self storage, office, industrial, retail and vacant land property types. Email [email protected], call (480) 663-1149 or visit yardimatrix.com to learn more.

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