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CoStar Group Inc. Lowers Near-Term U.S. Multifamily Forecast

Last updated: November 11, 2025
Taurigo

1. Cautious Outlook for Rent Growth and Vacancy Trends

CoStar Group Inc., a leading global provider of real estate marketplaces, information, and analytics, has announced a revised forecast for the multifamily sector in the United States. The updated projections reflect a more cautious stance regarding rent growth and vacancy rates through 2026, signaling potential challenges in the near term for the multifamily housing market.

Key Forecast Changes

According to CoStar's latest report, national apartment rent growth is now expected to decline by 0.1% in the fourth quarter of 2025. This marks a significant downward revision of 160 basis points from previous forecasts. The anticipated vacancy rate is set to hold steady at 8.2% through the end of the year before gradually decreasing to 7.9% by the close of 2026.

Grant Montgomery, National Director of Multifamily Analytics at CoStar Group, remarked, “The revised forecast reflects a more measured view of near-term performance.” However, he also indicated that a turning point is on the horizon. In the final quarter of 2025, the balance of supply and demand is shifting, as renters are projected to occupy more units than are added to the market—a positive change not seen since the third quarter of 2021.

Factors Influencing the Market

The updated outlook takes into account several economic indicators that are expected to impact the multifamily sector. A slowdown in employment growth, population increases, and household formation could contribute to delayed absorption rates in markets that are currently oversupplied. Nevertheless, the continued scarcity of for-sale housing inventory is helping to bolster multifamily demand, as many potential homebuyers remain priced out of homeownership.

Montgomery highlighted that the anticipated easing of the vacancy rate in 2026 will be supported by a shrinking construction pipeline and consistent renter demand, which are critical factors for the overall health of the multifamily market.

Broader Implications

The revised forecast from CoStar Group comes at a time when the real estate landscape is navigating various economic headwinds. With the multifamily sector facing challenges from both supply and demand perspectives, industry stakeholders will need to stay vigilant and adaptive to changing market conditions.

As a giant in the real estate analytics space, CoStar’s insights are invaluable for investors, property managers, and developers who rely on accurate data to make informed decisions in an ever-evolving market.

About CoStar Group

Founded in 1986 and headquartered in Arlington, Virginia, CoStar Group (NASDAQ: CSGP) is dedicated to digitizing the world’s real estate. The company offers a range of services through its major brands, including CoStar, LoopNet, Apartments.com, and Homes.com, among others. In the third quarter of 2025, CoStar’s websites attracted an impressive average of 143 million unique monthly visitors, showcasing its dominance in the commercial and residential real estate marketplace.

As the multifamily sector braces for a period of adjustment, CoStar Group's leadership in real estate analytics will play a crucial role in guiding the industry through these turbulent times. For further details on the multifamily forecast and other services, interested parties can visit costargroup.com.

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