Annual rent growth sees a milestone, even as prices ease in October

October marked the first month of rent cuts in the U.S. apartment market in 2026, but annual gains continue at a robust pace.

Same-store effective asking rents increased 1.7% year-over-year, according to October data from RealPage Market Analytics. That was the market’s biggest annual price increase since May 2023.

While the annual reading has improved, the gain stemmed less from robust monthly pricing and more from weak rent performance falling out of the annual calculation. In fact, rents came down a mild 0.7% during October, marking the first monthly rent cut in the U.S. in calendar 2026.

U.S. apartment occupancy faded to 95% in October, easing 20 basis points (bps) from the September showing. Still, October occupancy is up 40 bps in the calendar year and remains 10 bps ahead of the October 2025 showing.

Helping support occupancy and rent performance, the U.S. apartment market has seen supply and demand edge closer to balance recently. Renters absorbed nearly 304,800 conventional apartments in the year-ending 3rd quarter 2026, gaining ground on a cooling supply wave. Developers completed nearly 318,000 units in the past year, nearly half the recent peak from late 2024.

Bay Area and Midwest markets still lead for rent growth

Rent performance remained sharply split by market. Coastal tech hubs and Midwest metros delivered the strongest annual gains, while most Sun Belt markets kept logging rent declines.

Northern California's tech-driven markets posted the three strongest gains among the 50 largest apartment markets in the year-ending October. San Francisco saw rents hike 14.7% over the past year, San Jose followed at 9.5%, and Oakland reached 8.5%. All three markets are running near 97% occupancy.

Midwest markets make up much of the rest of the top 10 list. Milwaukee led the major Midwest markets with annual rent growth of 4.2%, followed by Chicago (3.3%), Kansas City (3.1%) and Cleveland (3.1%). Detroit and St. Louis both fell just shy of making the cut, with annual rent growth of 2.7% in each market.

Sun Belt rents still trail, but the gap is narrowing

The South region overall has returned to annual rent growth, though barely, at 0.5% in October. Sun Belt and Florida markets continue to see the nation’s steepest declines. San Antonio had the deepest cut among big markets at 2.6%, stemming from occupancy at 92.5%, also dead last among the largest 50 markets. Also posting rent declines in the year-ending October were Houston (-1.8%), Tampa (-1%), Charlotte (-0.9%) and Denver (-0.8%).

The bigger story, however, is how many Sun Belt markets have stopped seeing rent positioning hemorrhage. Annual increases have returned to Phoenix (0.4%) and Austin (0.6%), as well as Atlanta (0.8%), Raleigh (1.0%), Miami (0.6%) and Jacksonville (2.6%).