On the surface, October looked like more of the same for apartment owners: rents dipped again. Look one layer down and the story changes. The fall slowdown was the mildest in three years, annual growth kept climbing, and the number of big markets with falling rents has shrunk to a handful of supply-heavy cities.
The national numbers
Apartments.com's October report, released October 29, put the national average asking rent at $1,749, down 0.15% from September's $1,752. That is the second monthly decline in a row, following nine months of flat-to-positive readings. Fall softness is normal in apartments, and this one was gentler than usual: rents fell 0.25% in October 2025 and 0.13% in October 2024.
The annual figure is the better signal. Year-over-year rent growth rose to 1.6% in October, up from 1.5% in September and from 0.9% a year earlier. The report credits a market that is starting to find its footing after two years of steeper seasonal drops, while noting that a large, though slowly shrinking, inventory overhang is still holding pricing back.
A tale of two Americas: supply-constrained vs. supply-heavy
Location now explains almost everything. Over the year, the Pacific region led with 2.6% rent growth, followed by the Northeast at 2.4% and the Midwest at 2.3%. The South stayed subdued, and the Mountain region barely moved at 0.2%, though it did return to positive territory after a September decline.
At the metro level, San Francisco is in a league of its own, with rents up 12.9% from a year ago. San Jose followed at 8.4%, the East Bay at 6.3% and Norfolk at 5.5%. On the other side of the ledger sit the markets where deliveries are still running ahead of demand: Las Vegas was down 1.9% year over year and San Antonio 1.8%, with Houston and Orlando each down 0.8% and Charlotte down 0.7%.
The breadth is improving. Only 11 of the top 50 markets now show annual declines, and Raleigh, Atlanta and Austin moved back into positive territory in October. Month to month, though, the seasonal dip was nearly universal: 42 of the top 50 markets slipped, seven were flat and only Norfolk rose, by 0.2%. Louisville fell the most at 0.7%, with Denver, Austin and Seattle each down 0.6%.
What the operators are saying
Third-quarter earnings tell a similar story from inside the buildings. Independence Realty Trust, which focuses on non-gateway apartment markets, reported on November 2 that same-store net operating income rose 1.6%, with rental revenue up 2.0% and operating expenses up 2.5%. New-lease trade-outs improved 310 basis points from a year earlier, blended rent growth was 2.8%, occupancy held at 95.0% and resident retention was 60.5%.
Chief executive Scott Schaeffer said the company expects stronger growth in 2027 as concessions burn off and supply and demand improve. The REIT is also betting on scale: its pending merger with Centerspace would create an apartment REIT with about $8 billion of enterprise value, roughly 44,400 units and 163 communities across 17 states. Shareholders of both companies vote on November 10, and the deal could close as early as the end of the fourth quarter.
Why the setup looks better for 2027
The pattern in the data is consistent: where developers built aggressively during the cycle, rents are still digesting new supply; where building was hard, rents are moving up again. As the pipeline drains, the second group should widen. That is why operators are talking about concessions burning off rather than about further cuts.
Costs remain the catch. At IRT, operating expenses grew 2.5% while rental revenue grew 2.0%, a reminder that a return to rent growth does not automatically mean margin growth.
What it means for CRE investors and owners
Underwrite by submarket, not by region. A Sun Belt label tells you little when Atlanta and Raleigh are turning positive while San Antonio and Orlando are still falling. The key input is how much new supply is still to be delivered within a few miles of the asset.
The West Coast rebound is real but narrow. San Francisco's double-digit gain stands far above every other large market in the report, which describes the Pacific markets as more supply-constrained than the Mountain metros. We would treat it as a market-specific story, not a template for every coastal city.
Watch concessions, not just asking rents. Asking rents can look flat while effective rents improve as free-rent offers fade. Operators are pointing to that dynamic for 2027, and it is where upside in value-add business plans is most likely to show up first.
Scale is being rewarded. The IRT and Centerspace combination is a sign that public apartment owners see efficiency in size. For private owners of mid-size portfolios in secondary markets, that can mean more buyers at the table if they decide to sell.
Sources
CoStar Group / Apartments.com, Multifamily Rent Growth Report for October 2026 (Oct 29, 2026)
Independence Realty Trust, Third Quarter 2026 Financial Results (Nov 2, 2026)
Published by The Basis. Research dates, source references and illustrative assumptions are retained from the original article.
