U.S. apartment rents rose by an average of 1% in the first quarter of 2025, marking a notable recovery from the 0.3% decline recorded in the final quarter of 2024. This represents the strongest quarterly rent growth since Q1 2023.

Among the 72 U.S. markets with at least 50,000 apartment units, 68—or approximately 94%—posted quarter-over-quarter rent increases. By comparison, only 30 markets (42%) experienced rent growth in Q4 2024, underscoring a significant shift in market momentum. January marked the first month that landlords have seen positive rent growth in the Denver market since August 2024. Rents increased by 0.3% from December to January, according to CoStar data. The average rent for a one-bedroom apartment in the Denver market hit $1,826 per month in January, up $6 per month from December.

Vacancy Declines & Slowing Supply Support Rent Growth



Recent trends in rental performance across the U.S. multifamily sector appear closely tied to changes in vacancy. After rising steadily from late 2021 through the end of 2024, apartment vacancy rates declined in the first quarter of 2025, falling from a peak of 8.14% to 8.07%. The recent decline in vacancy is attributable to the higher quality, 4- and 5-Star apartment segment, where absorption has been strong enough to exceed supply growth. As a result, vacancies for 4- and 5-Star apartments have declined from a peak of 11.7% to 11.2%, and are forecast to fall below 10% by year-end. 

While the vacancy rate in the Denver market remains near historic highs at 11%, vacancy likely peaked in Q4 2024 and is now on a downward swing due to a combination of higher levels of demand and a slowdown in construction.Only 1,200 new units are expected to be delivered in Downtown Denver in 2025 – the lowest annual total since 2012. This pullback in supply should help ease market imbalances and support rent stabilization through the first half of 2025, assuming demand remains steady.

A slowdown in new supply has also contributed to the strengthening rent environment. Construction starts, the measure of how many apartment units begin getting built in a given period of time, have edged lower across the United States as developers respond to over-supplied conditions in certain markets, especially in the Sun Belt. In 2024, ~327,000 apartment units began construction across the nation. This was a 40% decline from the previous year, and the lowest total number of new apartment units started within a given year over the past decade. Roughly 128,000 new units were completed in Q1 2025, marking the third straight quarter of declining deliveries.

Looking ahead, reduced construction activity is expected to support continued rent growth. Only about 63,000 units broke ground in Q1—well below the long-term average—and the total number of units under construction fell to approximately 648,000, the lowest level since early 2018.

Source: CoStar News

Multifamily: Fort Collins, Loveland & Larimer County

Source: CoStar

Multifamily: Greeley & Weld County

Source: CoStar

Multifamily Leads Price Recovery in Commercial Real Estate

Multifamily continues to outperform other property types, showing steady price growth even as broader commercial real estate values soften. According to the latest CoStar Commercial Repeat-Sale Indices (CCRSI), multifamily prices rose 4% year-over-year in April, marking gains in nine of the past 12 months.

The sector’s resilience contrasts with ongoing weakness in nonresidential assets, which saw prices fall 5.1% over the same period. While commercial property prices overall dipped in April amid investor caution tied to global tariffs, high-dollar multifamily deals helped support pricing momentum.

Repeat sales of investment-grade multifamily assets climbed to $22.2 billion in the first four months of 2025, a 39% increase from a year earlier. Class A and B property trades alone rose 1.9% in April from March, indicating growing investor demand for high-quality apartments.

“Multifamily is often the first to recover in a downturn—and that trend is playing out again,” said Chad Littell, national director of U.S. capital markets analytics at CoStar. As construction slows and demand stabilizes, multifamily appears well-positioned to lead the next phase of market recovery.

Denver Multifamily Investment Rebounds in 2024

After a decade-low in 2023, multifamily investment in the Denver area surged in 2024, driven by renewed apartment demand and strong population growth. Denver’s population grew by nearly 31,000 from July 2023 to July 2024, the strongest annual gain since the pandemic began. This growth supported rising apartment demand and helped reignite investor confidence, despite lingering headwinds from high interest rates and recent supply surges.

Roughly $4.5 billion in multifamily assets traded last year—up from just $2.7 billion in 2023—marking the highest total since 2021, according to CoStar. A total of 227 properties changed hands, including 13 deals over $100 million. The average price per unit ended 2024 at $304,000—above the national average of $226,000 but still below Denver’s 2022 peak of $368,000. 

Source: CoStar News

Ledge Rock Sale Marks One of Northern Colorado's Largest Multifamily Deals of the Year

In Northern Colorado, South Carolina-based Graycliff Capital Partners recently acquired the 252-unit Ledge Rock apartments in Johnstown for $74.5 million, or $295,635 per unit—one of the region’s largest multifamily sales this year. The newly built, amenity-rich complex is still in lease-up and located just off I-25, about 22 miles south of Fort Collins. This marks Graycliff’s second major investment in the area, following its 2022 acquisition of Johnstown Plaza apartments for $73.1 million

Source: CoStar News

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