U.S. monthly apartment rent growth declined last month in its largest October drop in more than 15 years as an oversupply of units affects all parts of the country.
The national average rent fell to $1,708, a 0.3% decrease from September's revised figure of $1,713. That marks the fourth consecutive month of no change or a negative change in monthly rent, according to a report from CoStar's Apartments.com.
Three of the five steepest monthly rent reductions over the past 15 years occurred this August, September and October, Apartments.com said.
"Apartment rent growth typically follows a seasonal pattern, with acceleration in the spring and a slowdown in late summer and fall," Apartments.com said in the report. "Since 2022, elevated supply levels nationally have turned that deceleration into outright decline each fall."
Annual rent growth slowed to 0.8%, according to the report. That's down from 1.5% at the beginning of the year.
"While many markets have moved past peak supply, a substantial inventory overhang continues to weigh on rent growth across the country," the report found.
National rent reduction
All U.S. regions posted declines in rent in October, with the West leading the country with a 0.53% month-over-month decrease, followed by a 0.28% slide in the South and a 0.24% drop in the Northeast, according to Apartments.com. Rents in the Midwest declined 0.18% in October.
On an annual basis, the Midwest posted the strongest performance in the country with 2.2% rent growth, followed by the Northeast at 1.8%. The South's rents remained unchanged year over year, while those in the West declined by 1.4%.
The Mountain West and Sun Belt markets continue to face elevated vacancies with "aggressive new supply" numbers putting downward pressure on rents, according to Apartments.com. The steepest monthly rent decline occurred in Denver, down 1.3%, followed by Austin, Texas, which fell 1.1%. Seattle rents declined by 0.9%, while rents in Salt Lake City and Phoenix both dropped by 0.8%.
"Amazon's recent job cuts in Seattle, in particular, could be weighing on demand there," the report said.
In terms of annual rent growth, San Francisco led the nation with 5.8%, followed by San Jose, California, at 3.8%; Chicago, Illinois, at 3.6%; and Norfolk, Virginia, at 3%. In contrast, Austin's annual rent declined by 4.6%, while Denver saw a 3.7% drop and San Antonio a 2.7% decrease, "all driven lower by oversupply outpacing demand," the report stated.
"The fourth quarter of 2025 is now expected to mark the first time since the third quarter of 2021 that renters occupy more units than are added to supply," CoStar National Director of Multifamily Analytics Grant Montgomery wrote in an insight piece earlier this month. "This shift should allow the overall vacancy to finally begin to recede in 2026, aided by a shrinking construction pipeline and resilient renter demand."