New Apartment Supply Surge Drives Rents to 4-Year Bottom

This is good news for many Americans, especially those in urban enclaves, and younger people just starting: Apartment rents have dropped to a four-year low.

There's a good reason for this. The drop is claimed to be due to softening economic conditions, and some new construction, but this piece misses the big, noisy elephant in the room.

Apartment rents continued their slide into the new year, as fresh supply still makes its way through the market, and landlords strive to gain pricing power over a struggling consumer.
The national median rent in January was $1,353, a drop of 1.4% compared with one year ago, according to Apartment List. This is now the fourth consecutive winter with a “pronounced” offseason dip, and is the largest annual drop since September 2023 and the lowest January rent since 2022. Rents are now 6.2% lower than their last peak in the summer of 2022.

Note that this piece doesn't mention where that new supply came from. Hint: It's not a sudden increase in building multi-family housing. It's sudden vacancies, resulting from the departure of people who have been deported. Demand won't necessarily drop; as prices decrease, more people will take advantage of that, but they will be people who are here legally, one way or another. Meanwhile, thanks to the departures, the supply has increased. This is Economics 101.

The national vacancy rate was 7.3% in January, a record high on Apartment List’s index, which dates to 2017. Units are also taking an average of 41 days to get leased, four days more than in January 2025 and another high for the index.
“Early last year, it appeared that annual rent growth was on track to flip positive for the first time since mid-2023; however, that rebound stalled out and reversed course during a slow summer moving season that has now dragged into the winter,” wrote Chris Salviati, chief economist at Apartment List.
The record supply of new apartment units has peaked, but there is still a good amount coming through the pipeline. That is coming up against weaker demand because of a tighter job market and slower household formation.

The supply hasn't peaked yet, at least I don't think so, but time will tell.

NEW: Massive Increase in Demand for Rentals Driven by Influx of 'Foreign-Born Population,' Says HUD

If anyone has been paying attention, and the legacy media has been awfully quiet about this, there's a very good reason for this sudden boom in vacancies: 2,000,000 illegal aliens have departed the United States, voluntarily or involuntarily. A fair number of these people, likely a majority, occupied apartments, housing that otherwise could have gone to younger and/or lower-income Americans. It's a huge fringe benefit from the Trump administration's crackdown on illegal immigration.

Of course, many younger Americans, some in my own family, are still struggling to find a way to afford to own their own home. Housing prices are still high, and in many areas (I'm looking at you, San Francisco), onerous regulations, permitting requirements, and zoning make it difficult or impossible to build new houses. That's another problem, and it's not one that the federal government can easily fix.

Meanwhile, I guess that deportations, voluntary and involuntary, will continue, and so will increased availability of housing formerly occupied by illegal aliens. That's something that Washington can, and should, do to make housing more affordable - and affordability is apparently going to be one of the key phrases in the upcoming midterm elections.

Editor's Note: This article was updated post-publication for clarity.

Editor’s Note: Thanks to President Trump’s leadership and bold policies, America’s economy is back on track.

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