U.S. Apartment Market Sees the Return of Annual Rent Growth

The U.S. apartment market saw the return of modest annual rent growth in July, a feat achieved by slow-but-steady gains every month so far in 2026.

Same-store effective asking rents increased 0.4% year-over-year, according to data from RealPage Market Analytics. While mild, this performance marked the first sign of positive annual rent growth since July 2025.

The return of annual price increases was realized by small monthly gains sustained in every month of 2026. U.S. prices were up 0.3% in July, marking seven monthly increases ranging from 0.2% to 0.6%. This sustained period of mild growth signals that apartment fundamentals continue to improve, even as some markets endure elevated new supply volumes.

As of July, U.S. apartment occupancy was at 95.5%, down a slight 10 basis points (bps) from June but matching the July 2025 showing. The modest decline in July followed six consecutive months of occupancy increases that were equally as mild. In total, occupancy has climbed 90 bps since the end of 2025. This followed a steady decline throughout the back half of 2025.

Helping occupancy and rent growth fundamentals, the U.S. absorbed more than 187,000 units in the April to June time frame, marking one of the strongest spring leasing seasons in recent years. Annual demand, however, was held back by net move-outs recorded in late 2025. Demand totaled roughly 271,300 units in the year-ending 2nd quarter, at a pace that trailed the decade average of about 340,000 units.

Meanwhile, annual apartment supply volumes dropped below the decade norm for the first time in three years. Roughly 77,700 units were completed across the U.S. during 2nd quarter, bringing annual deliveries to about 340,200 units. This marks the sixth consecutive quarter of declining annual supply after deliveries peaked near 588,000 units in late 2024.

Tech Markets Drive Rent Growth

Tech-focused coastal markets continued to post some of the strongest rent growth nationwide, supported by constrained supply pipelines and ongoing expansion in high-paying technology jobs.

San Francisco led major U.S. markets with annual rent growth of 13.5%. San Jose followed with annual rent growth of 8%, while Oakland posted gains of 4.8%.

Virginia Beach has emerged as one of the nation's strongest apartment markets, with rent growth of 6.3% in the year-ending July. This pace topped even the growth seen in New York, the nation’s typical rent growth leader, which is now seeing annual price increases closer to 4%.

Several Midwest markets posted healthy rent growth in the year-ending July 2026, reflecting steady demand and relatively manageable levels of new supply. Milwaukee led the major Midwest markets with annual rent growth of 4.1%, while Chicago recorded a 2.7% increase. More moderate gains were seen in Minneapolis (2.1%) and Detroit (1.7%).

Supply Still Pressuring Many Sun Belt Markets

The only region across the U.S. still seeing annual rent cuts is the South. The South also remains the only U.S. region with apartment occupancy below 95%.

The Sun Belt markets are the key drivers of this decline, as continued supply pressure weighs on market fundamentals. San Antonio continued to post some of the nation's deepest annual rent cuts at nearly 5%. Meanwhile, price declines were around 3% in Tampa, Phoenix, Austin and Charlotte.

Despite supply pressures, many of these markets continue to generate healthy demand. As construction activity gradually slows, these markets could be among the first to benefit from an improving supply/demand balance.

In a handful of these markets, pricing performance was further challenged by softer tourism demand, reflecting a broader pullback in discretionary consumer spending. Class C units in these markets were especially troubled, where reduced demand from service-sector and tourism-related workers contributed to rent declines.