Multifamily Housing Trends For 2025

The multifamily housing industry has experienced a rollercoaster of changes over the past few years. It withstood the 2020 recession better than most property sectors—only industrial held up better—and market deterioration was far less than in previous recessions.

The market isn’t the only thing that’s changed in recent years. The strategies that property managers use to market their properties, attract new renters, and screen their applicants have evolved, too.

Market Trends

2022 was a strong year for the rental market. Rents continued to rise each month, and demand was strong. In fact, in March of 2022, we saw an annual growth rate of 15.7%! It was unlike anything we had seen in years.

But what goes up must come down. Rents have been slowly declining since October of last year. While this may seem like a cause for concern (after all, trending downwards usually isn’t a great sign), what it really means is that rents are starting to normalize. This is welcome news for renters after a few years of skyrocketing prices, but it won’t necessarily translate to lower prices on a national level. Some cities may see more drastic changes in rent prices, depending on factors such as new supply and local demand, but overall, it’ll return to business as usual.

As for vacancy rates, the national rate is sitting at around 6%. While we saw a lower vacancy rate in late 2021 when the multifamily businesses were thriving (around 4.1%), the national average typically sits at around 5% when things are stable. This rate is expected to continue to drop as demand increases throughout Q2 and Q3.

While things have slowed down a bit in the first quarter of 2025, analysts remain confident that demand for rentals will continue to drive growth as long as the labor market remains stable. Don’t worry too much about a downturn — there’s plenty of reason to keep your heads up in the world of multifamily.

Operational Trends

Staff Retention Leads to Tenant Retention

Seasoned property managers know that keeping good tenants in place comes down to keeping the staff you have. Knowing this will become increasingly important as the market continues to evolve in 2023.

During the era of quiet quitting and the Great Resignation in 2022, we discovered that apartment firms with higher staff turnover tend to have lower resident retention rates. According to talent performance solutions provider Grace Hill, every 3% reduction in staff turnover nets a 4% decrease in residents leaving. That means a 15% improvement in employee retention translates into a 20% boost in resident renewals. That’s a benchmark to aim for in the years to come.

Document Fraud is on the Rise

Document fraud has become increasingly common in recent years, and it’s past time to take it seriously. The issue? Tenants are getting savvy and are altering their bank statements and paystubs to make it appear as though they meet your income requirements, even if they don’t. If they themselves don’t know how to do it, there are numerous shady companies that will do it for them at a low cost.

But there’s good news too: Snappt has developed a screening platform that can detect these fraudulent documents right off the bat, saving you a potential world of headaches down the line.

Property Trends

Whether you’re a property owner or a prospective renter, keeping an eye on the latest property trends can be the difference between success and mediocrity. Here are a few key trends we’re keeping our eyes on as we continue through 2023.

Sustainability

As more people focus on reducing their carbon footprint, it’s no surprise that sustainability is becoming a major trend in the housing industry. From energy-efficient appliances to composting bins, renters are seeking a range of eco-friendly features that can help mitigate their environmental impact.

Hybrid Living Spaces

Ever since the COVID-19 pandemic began, remote work has remained a popular option. Many renters are seeking housing options that can accommodate their evolving work habits. This might include more spacious floorplan options, allowing them to keep their workspace and living space separate. We’ve also seen a rise in “hybrid” living spaces, which combine traditional living areas with designated workspaces. Some complexes may even include a coworking space for their tenants.

New Tech

From smart thermostats to tricked-out security systems, smart technology has officially arrived in the multifamily industry. Tenants are looking for properties that offer advanced tech to help make their lives easier and safer. Think about adding remote-controlled locks, smart lighting, or temperature control to your units.

Electric vehicle charging stations are also becoming a need for many renters. These environmentally friendly cars are on the rise, especially in states on the West Coast. Adding these stations not only shows that you want to provide useful amenities to your residents but also that you care about the environment.

Location, Location, Location

As cities continue to expand, renters are becoming increasingly focused on finding housing options that are close to the places they love. Whether it’s a vibrant downtown scene packed with trendy bars and restaurants or a quiet suburban neighborhood close to parks, renters want to live in areas that reflect their lifestyles and priorities. It’ll be more important than ever for property managers to market their properties in a way that can highlight the features of the surrounding neighborhoods.

Pickleball, Anyone?

If you haven’t heard by now, pickleball is the next up-and-coming sport that’s sweeping the nation. We’ve already discussed the importance of resident retention, so what better way to hold on to great tenants than to build a court that provides endless entertainment? Pickleball is a sport popular amongst everyone, from your 60-something grandfather to spry 15-year-olds looking to pass the time. With its looming admission into the Olympics, we don’t see this sport going anywhere anytime soon.

To Sum Up…

As we progress through 2024, the multifamily rental market will continue to experience change. While experts predict a slowdown in demand during the first half of the year, a rebound is expected in the second half. Property managers should stay on top of rising trends to remain competitive and attract great tenants. Lastly, don’t forget to keep an eye out for document fraud in rental applications and invest in advanced screening platforms like Snappt!

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