The U.S. apartment market saw a slight uptick in rent growth and occupancy in February,

The U.S. apartment market saw a slight uptick in rent growth and occupancy in February, signaling early signs of stabilization after nearly two years of sluggish performance.

Small momentum: Market-rate apartment rents increased by 0.41% in February, according to RealPage Market Analytics. While this figure remains below the long-term February average of 0.53%, it marks the strongest February reading since 2022. On an annual basis, effective asking rents grew 0.8%, the highest YoY increase since July 2023.

Occupancy inches upward: National apartment occupancy rose to 95%, up 10 basis points (bps) month-over-month and 90 bps year-over-year. Notably, high-supply markets like Phoenix, Fort Worth, and Orlando saw 20-bps occupancy gains, despite struggling with rent cuts. About 80% of major U.S. markets reported month-over-month occupancy increases, hinting at growing demand catching up with supply.

Winners and Laggards in Rent Growth

• Chicago led the nation with a 4.2% annual rent increase, followed by Richmond (3.7%), Pittsburgh (3.3%), San Jose (3.3%), and Washington, DC (3.2%).
• Austin remained the weakest market, posting a 7.2% annual rent decline, though its 0.15% monthly drop was the mildest in nine months.
• One-third of the top 50 markets still saw annual rent cuts, mainly in areas with significant new supply.

Concessions on the rise: The use of rental concessions—such as free rent—increased slightly by 1% YoY. The South led in discount offerings, with Cape Coral, San Antonio, Crestview-Destin, and Myrtle Beach having at least 25% of vacant units offering incentives.

? THE TAKEAWAY

Looking ahead: While rent growth remains below historical averages, demand is picking up as the construction pipeline slows. Expect continued stabilization in 2025, with occupancy gains supporting a gradual return to stronger rent performance—especially in supply-heavy markets finally seeing absorption catch up.