Multifamily Market Correction Hits Hardest in Denver, Austin, and Beyond
In October, a pattern of pronounced monthly rent declines emerged across a handful of major U.S. apartment markets, revealing the persistent impact of supply-side surges and shifting demand on pricing power.
According to the latest Apartments.com multifamily rent growth report, Denver posted the steepest fall, with average rents dropping 1.3 percent for the month. Austin followed at 1.1 percent, Seattle at 0.9 percent, and both Salt Lake City and Phoenix saw declines of 0.8 percent.
These figures are striking not only for their severity—three of the five steepest monthly rent cuts in more than 15 years occurred within the last three months—but also for their geographic concentration in the Mountain West and Sun Belt regions.
Industry analysts have been tracking the impact of aggressive new supply pipelines, and the report's data make clear that elevated vacancies remain a central force behind the recent downturns in these metros. Supply pressures have been building across the West and South for several quarters, with development activity still outpacing absorption.
As inventories pile up, landlords are increasingly forced to price for vacancy rather than future rent growth, resulting in steeper reductions and tougher negotiations with prospective tenants. This dynamic is especially pronounced in Denver and Austin, where the influx of newly delivered units has saturated the market and strained operational performance.
While supply-side factors are the primary driver of rent softness, Apartments.com also highlights secondary demand issues in several metros. In Seattle, beyond a mounting supply pipeline and vacancy rate, the city’s rental landscape is grappling with the ripple effects of sizable employer layoffs. Amazon’s recent job cuts have injected uncertainty into local multifamily leasing and are likely to have contributed to weaker demand in the fall. The timing of corporate belt-tightening, paired with a cooling tech sector, has sharpened the drop in monthly rents and added another layer of fragility to the market’s recovery prospects.
Salt Lake City and Phoenix, markets that surged early in the post-pandemic cycle, are similarly grappling with overbuilding. Developers responded to rapid population growth and job creation with ambitious construction. But as absorption lags and in-migration slows, rent growth has reversed course.
Austin’s downturn serves as a cautionary tale for investors and owners chasing momentum markets. After experiencing some of the fastest rent growth nationally in 2021 and 2022, the Texas capital now faces mounting inventory, flattening relocations and fierce competition among operators.
The 1.1 percent monthly decline marks one of the sharpest adjustments in the U.S. and signals the extent to which oversupply can unwind pricing gains even in markets with strong long-term demographic tailwinds.
October’s multifamily rent performance—particularly in Denver, Austin, Seattle, Salt Lake City and Phoenix—offers a vivid illustration of the challenges facing owners and investors in supply-driven environments. As the industry moves deeper into the fourth quarter, with annual rent growth slowing nationally and pronounced declines echoing across high-growth metros, the market’s delicate balance between new inventory and sustainable demand is coming into sharper focus.
Source: GlobeSt/ALM