While many markets are experiencing the continued national decline in rents, another trend has emerged, with some metros seeing more out-of-market renters than in-market renters.
Realtor.com, in its October report, says over the past six years, 20 of the 50 largest metros have transitioned from being dominated by local renters to being more driven by out-of-market demand.
As an example, the report compares New York City, which has the largest share of demand from local renters at 74.8%, to Raleigh, N.C., which is attracting the highest proportion of out-of-market renters at 69%.
Joel Berner, senior economist for Realtor.com, pointed out that some areas are really seeing a lot of out-of-town renters coming in. In an interview with Rental Housing Journal, Berner said, “There are some hot places like Raleigh, North Carolina. People are interested in moving to Raleigh. That I think is genuinely getting a lot of out-of-market activity.
“But in some places – a lot of places – people who would be moving in town are staying put. Those people are not shopping on Realtor.com. So, it looks like a larger share of out-of-towners.
“There are a lot of people who would have upgraded their rental within the same metro area where they live, maybe moving a couple of blocks away to a nicer unit. They are not doing that this year. They are staying in place.”
Out-of-Towners
“The share of activity looks like it is growing in favor of out-of-towners, but that has actually held pretty steady for a lot of places. So, there is actually less local activity going on.”
Of the 20 largest metro areas that shifted from more in-market views to more out-of-market views, the most pronounced are the more affordable metros such as Detroit, Philadelphia, and Sacramento; areas where relatively lower rents have attracted out-of-town rent-shoppers.
There is a hidden piece of this, too – the retention piece.
“The share of folks moving city to city is about steady year over year or year over five years. The stories I am hearing are the people concerned about their jobs. People are not interested in moving. In bad times, it’s a risk. I think the prevailing economic sentiment is more conducive to people staying in place,” Berner said. “I am skeptical that anybody in the country will up and move to save $100 a month in rent.”
A report from RealPage also points out that both Raleigh and Nashville are markets dominated by views from out-of-market renters.
“These metros generally offer more affordable home prices, which contribute to higher homeownership rates and a smaller pool of local renters. At the same time, they attract newcomers with strong job opportunities and renter-friendly environments,” the report says.
Looking ahead, RealPage predicts the multifamily industry could see an improved market momentum into 2026
In its third quarter 2025 analysis of the multifamily housing sector, the report noted that the average advertised rent price decreased for only the second time since 2009. Home values have risen at twice the pace of market-rate rental units since 2020, pushing the typical mortgage payment well above the nation’s average rent and keeping many households in the rental market longer.
“Resident retention has increased and is approaching an all-time high as the current cost of renting is significantly less expensive than homeownership,” said Carl Whitaker, chief economist at RealPage. “With residents staying put longer, owners and operators have an opportunity to create an even higher-quality resident experience and build a stronger sense of community at their properties.”
Q3 Industry Takeaways
- Occupancy backtracked quarter-over-quarter to 95.4%.
- The South region has added a quarter of a million units in the past 12 months (more than twice the second-fastest growing West region). As such, rents are down 1.7% in the past 12 months in the South, while the West saw rents fall 0.4%. Conversely, the Midwest & Northeast regions have seen rents grow 2.3% and 1.9%, respectively.
- San Francisco’s 7.1% rent growth in the past 12 months is far ahead of second-ranking Chicago (4.5%).
“According to RealPage data, the outlook for the U.S. apartment market in the next 12 months is that supply will cool considerably from its current level,” added Whitaker.
Q4 Industry Outlook
- Nationwide, supply is starting to cool, with 105,000 units delivered in the third quarter, the fewest since the second quarter of 2023, and a 35% decline versus the third quarter of 2024.
- The 324,000 units scheduled to be completed in the next 12 months would be the fewest in a given 12-month window since the second quarter of 2020.
- Construction activity shows supply will remain below normal for some time once this current wave of deliveries subsides.
- Currently, just 519,000 market-rate apartment units are under construction nationally; the fewest number in more than 10 years.
The continued rise in resident retention with new lease shopping suggests that demand for market-rate apartments remains healthy. Current trends do not mirror past economic downcycles, when both retention and new lease activity contracted significantly. In fact, should strong resident retention persist, the multifamily industry could see an optimistic client base and improved market momentum heading into next year.
John R. Triplett is the publisher of RentalHousingJournal.com and a veteran journalist who has worked for Cox, Gannett, and Belo. He and his business partners also own a digital marketing company, Desert Path Consulting LLC. The RentalHousingJournal.com is an interactive community of multifamily investors, independent rental home owners, residential property management professionals, and other rental housing and real estate professionals. Reprinted with permission.