The U.S. multifamily market continued its strong recovery in the second quarter, as robust absorption reduced the national vacancy rate, according to CBRE’s latest research.

Positive net absorption, which measures the change in the number of occupied units, totaled 188,200 units in Q2 2025, the strongest second-quarter performance on record. This marks the fifth consecutive quarter in which demand surpassed construction completions. As a result, the overall multifamily vacancy rate fell by 70 basis points to 4.1%, well below its long-term average of 5.0%.

After a record 450,000 new units in 2024, only 83,000 units were delivered in Q2 2025, with a more pronounced slowdown expected in coming quarters.

“Multifamily fundamentals strengthened dramatically in the second quarter, as robust renter demand continues to outpace new deliveries. We expect the gains to continue this year and accelerate in 2026,” said Kelli Carhart, Head of Multifamily Capital Markets for CBRE. 

Average monthly rent increased 1.2% year-over-year in Q2 2025 to $2,228, the first time in two years that rent growth exceeded 1%. Rent growth is likely to further improve amid slowing construction completions and healthy absorption.

Multifamily investment volume rose 7.1% year-over-year in Q2 2025 to $32.9 billion. The multifamily sector accounted for the largest share of total commercial real estate investment volume in Q2 2025 (34%).

Other Q2 2025 Multifamily Sector Highlights: 

•    The Midwest (3.7%), Northeast (3.1%) and Pacific (1%) regions experienced solid year-over-year rent growth. 

•    All 69 markets tracked by CBRE recorded positive net absorption in Q2 2025, with New York (19,300 units), Chicago (9,300) and Dallas (8,700) leading the way.

•    Sixty-eight markets saw net absorption exceed new supply in Q2 2025, up from 52 markets in Q1 2025 and 65 in Q4 2024.

•    Vacancy rates declined in 68 markets quarter-over-quarter in Q2 2025, up from 52 markets in Q1 2025.