Yardi Matrix flags structural challenges as renters face rising costs and limited options
The multifamily housing sector posted tepid rent growth in June as an influx of new supply and macroeconomic uncertainty weighed on performance, according to Yardi Matrix’s latest national report.
Rents rose a modest $20 in the first half of 2025, up 1.2% year to date, signaling stable demand despite headwinds from slowing economic growth and evolving trade policies. On a year-over-year basis, national average multifamily asking rents increased 0.9%.
In the single-family build-to-rent (BTR) segment, rents climbed 0.7% annually in June, reaching a new milestone of over $2,200 per month. The strongest growth came from Chicago, Kansas City, and the Inland Empire region of California.
“Still, after two years of record deliveries, even modest growth signals resilient demand,” the report said, noting that more than 250,000 units were absorbed through May, nearly 9% of them in Austin alone.
Despite encouraging absorption figures, the outlook is clouded by lingering policy risks. Tariff changes, recently delayed to August, have left developers and investors facing planning uncertainty.
“Tariffs are the big unknown,” Robert Martinek, director at EisnerAmper, said in an interview with Mortgage Professional America. “I’m a believer that I don’t think it’s going to have a big effect. I think construction is planned to be down. You know that you’re going to get steel and aluminum, and concrete is up. But it typically works itself out.”
Meanwhile, the labor market shows signs of cooling. Job switching has slowed, reducing wage pressure and possibly muting future rent gains, even though unemployment remains low.
A Harvard Center for Joint Housing Studies report cited in the Yardi analysis emphasized the growing financial strain on renters. In 2023, half of US renters spent over 30% of their income on housing and utilities, while 27%, or 12.1 million households, paid more than 50%. Renters earning between $30,000 and $44,999 were hit hardest, with 70% considered cost-burdened.
Affordability remains a key concern as most of the over 600,000 units delivered this year were luxury builds, out of reach for many middle-income renters.
“The number of higher-rent units has increased dramatically, while the number of lower-rent units has fallen substantially,” the report said.
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The imbalance is particularly severe in high-cost coastal cities with sluggish supply growth and in fast-growing Sun Belt markets grappling with migration-driven demand.
While rental markets have proven resilient, the report concludes that the second half of 2025 will hinge on how inflation, tariffs, and construction trends unfold in a still-uncertain economic environment.
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