RDE Capital Group LLC

U.S. multifamily rent growth could climb to 3% by the end of 2025, according to Costar Group, as a tightening supply-demand balance in the rental market puts upward pressure on rents.

In 2024, approximately 690,000 new units were introduced to the U.S. market. However, projections for 2025 indicate a sharp decline, with only 378,000 units expected—a 45% drop. Meanwhile, the market absorbed 547,000 units in 2024. If this absorption rate holds steady, demand will outpace new supply, exerting upward pressure on rents.

As a result, renters could face increasing costs throughout the year, reinforcing expectations of a 3% rent growth by year-end.