Apartment rents drop in July as vacancies move to multiyear high

A sign on the side of a building in Hell's Kitchen, New York City, advertising an apartment is available for rent through a real estate broker

The report notes that while the market has passed the peak of this construction boom, it is still overbuilt relative to demand.Landlords are not quite as overstocked as they were at the start of this year, but it is still more of a renter's market

Last year more than 600,000 new multifamily units hit the market, representing a 65% increase compared with 2022 and the most new supply in a single year since 1986, Apartment List found.For July, it took an average of 28 days to lease units after they were listed, according to the report, slightly longer than in June but down from the recent high of 37 days seen in January.Rents nationally were unchanged in July compared with June; the median rent was $1,402, according to Apartment List

Rents peaked earlier this year, and rent growth has now stalled during the peak moving season when growth is usually fastest.Rents this month were down 0.8% from the same month last year, according to the report

They had been apaching positive annual growth early this year but have now been negative for three straight months, according to Apartment List data.Get perty Play directly to your inboxCNBC's perty Play with Diana Olick covers new and evolving opportunities for the real estate investor, dered weekly to your inbox. here to get access today."All of our key indicators are pointing toward sluggishness in the multifamily rental market – rent growth is slipping and the vacancy rate is at an all-time high," the report said. "A return to tighter market conditions should still be on the horizon, but the outlook has been complicated by macroeconomic whiplash being caused by tariffs and other policies being pursued by the Trump administration

That uncertainty appears to have modestly dampened demand during this moving season."Regionally, rents were up in July from June in 37 of the nation's 54 metropolitan areas with a population of more than 1 million, Apartment List found

Less than half of these cities, however, are seeing positive rent growth compared with a year ago

Rent declines are most prevalent in the formerly very hot South and in the Mountain West, according to the report.Austin, Texas, wins the dubious award of being the nation's softest rental market, with rents there down 6.8% compared with July of last year

Other strong include Fresno, California, and Chicago."Although the supply wave is receding, the number of units that hit the market in the first half of this year was still above the long-run average

With construction expected to slow further in the second half of this year and into 2026, conditions are ly to shift," according to the report.Don’t miss these insights from CNBC Bank of America says these five stocks have more room to run ahead of earningsThese overbought stocks could take a dip after the market's record gainsGoldman Sachs is getting worried the economyWhat the prediction are saying the big Wall Street events ahead