U.S. Apartment Market Sees Strong Leasing Momentum

The U.S. apartment market saw strong momentum in new lease trade-out in the first three months of 2025.

The month-over-month change in new lease trade-out ranked consistently around 1.4% in January, Febraury and March. While this time frame historically is a strong one for the U.S. apartment market, early 2025’s momentum was the strongest in at least three years.

However, recent upturns haven’t pulled overall trade-out back into positive territory just yet. March’s trade-out rate for new leases was right at 0%, which means new leases signed in March had executed rents roughly equal to what the prior tenant was paying for the same unit.

Recent upturns have made for a different trend than what we were seeing less than six months ago, though. In November 2024, trade-outs were leasing for 4% less than the previous resident. Historically, that was a significant decline. And the turnaround seen in more recent months was truly impressive in compaarison.

For pricing overall, 1st quarter also saw improvement. When looking at the change in effective asking rents between 4th quarter and 1st quarter, 2023 and 2024 showed a pattern of loss.

But in 1st quarter 2025, the perforamnce strengthened, as rents were up by 34 basis points (bps) over 4th quarter 2024 prices.

Historically speaking, that change was still below the perfomance from much of the 2010s decade, which averaged accelleration of around 60 bps, but at least it is a demonstration of strength in the market overall.

For more information on the state of the U.S. apartment market, including forecasts, watch the webcast Market Intelligence: Q2 U.S. Update.