America’s Empty Apartments Are Finally Starting to Fill Up
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America’s Empty Apartments Are Finally Starting to Fill Up

If that demand is sustained, landlords likely will have more pricing power starting sometime next year

By WILL PARKER
Thu, Nov 7, 2024 9:05amGrey Clock 3 min

The biggest apartment construction boom in four decades flooded the market with new supply over the past two years. Apartment owners had to contend with a surge in empty units.

That is starting to change.

The vacancy rate, or the share of apartment units that are empty, stopped rising for the first time in three years last quarter, as demand for apartments rose to its highest levels since 2021, according to CoStar .

The more than 1.2 million new apartment units that were built during the past two years are filling up. If that demand is sustained, if the economy remains strong and if housing prices remain near record highs, landlords likely will have more pricing power starting sometime next year. That could allow building owners to raise rents more than they have recently.

Some 672,000 new apartment units will have been completed by the end of this year, but only about half that number is expected in 2025, and even fewer in 2026, CoStar said.

“The worst of the pressures on pricing from new supply are likely behind us,” said Eric Bolton , chief executive of publicly traded landlord Mid-America Apartment Communities , on an October earnings call.

Housing affordability has become a hot-button election issue at the federal and local levels. Any sign that rents are poised to rise in 2025 could intensify pressure on the new administration to address housing costs. President Biden announced a plan over the summer to cap rent increases, though it would need to pass Congress.

Nationally, sales of apartment buildings have also started to pick up again, as investors become more confident that the market is bottoming and sellers are more willing to acquiesce on price.

Renters were hit hard by the historically high rent increases during the pandemic years, especially in Sunbelt cities, such as Phoenix and Tampa, Fla., where rents rose 20% or more during 12-month periods.

Rents for new leases nationwide have held close to flat for more than a year. That is due in part to a big split between supply-heavy Sunbelt cities, some of which have seen rent cuts, and the rest of the country, which hasn’t.

Renters who choose to renew their leases were still paying a 3.5% rent increase on average as of this past August, the most recent month data was available from Yardi Matrix.

Throughout this year, the places with the highest renewal rent growth have been on the coasts and in the Midwest. New York City, Los Angeles, Indianapolis and Columbus, Ohio, saw renewal rent increases of 5% or more in July, according to Yardi.

Increased return to office orders in major employment hubs may also start translating into even more urban rental demand soon, especially in coastal cities.

In Seattle, Equity Residential said in an October earnings call that it is seeing a pickup in leasing from Amazon employees, who are locking in apartments ahead of a five-day office attendance policy, scheduled to begin in January.

On the flip side is Austin, Texas, which has experienced a building boom after companies such as Tesla and Oracle moved offices there. Austin’s vacancy rate, if new buildings are included, is the highest in the country at over 15%, according to CoStar.

Rent growth for new leases in the Texas capital ranks last among major metros during the past year. Landlords of new luxury buildings are still offering big concessions, such as months of free rent, to fill up units. undefined undefined “Basically, the worst apartment market in the country right now is Austin,” said Matt Rosenthal , managing partner of multifamily investor Eastham Capital.

On an annual basis, apartment building sales have grown for two consecutive quarters, according to MSCI Real Assets. Places seeing some of the biggest increases in sales include Denver, San Francisco and the Washington, D.C. suburbs.

Apartment companies also continue to feel tailwinds from renters locked out of homeownership. Major owners have remarked on how few of their renters move out to purchase homes now, amid some of the worst conditions for home-purchase affordability in four decades. That is unlikely to change much in 2025.

“Probably the biggest story this year that we’ve seen [is] from people coming in the front door and then not leaving [out] the back door,” said Joe Fisher , president of publicly traded apartment owner UDR .



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James and Ellen Patterson are hardly Luddites. But the couple, who both work in tech, made an unexpectedly old-timey decision during the renovation of their 1928 Washington, D.C., home last year.

The Pattersons had planned to use a spacious unfinished basement room to store James’s music equipment, but noticed that their children, all under age 21, kept disappearing down there to entertain themselves for hours without the aid of tablets or TVs.

Inspired, the duo brought a new directive to their design team.

The subterranean space would become an “analog room”: a studiously screen-free zone where the family could play board games together, practice instruments, listen to records or just lounge about lazily, undistracted by devices.

For decades, we’ve celebrated the rise of the “smart home”—knobless, switchless, effortless and entirely orchestrated via apps.

But evidence suggests that screen-free “dumb” spaces might be poised for a comeback.

Many smart-home features are losing their luster as they raise concerns about surveillance and, frankly, just don’t function.

New York designer Christine Gachot said she’d never have to work again “if I had a dollar for every time I had a client tell me ‘my smart music system keeps dropping off’ or ‘I can’t log in.’ ”

Google searches for “how to reduce screen time” reached an all-time high in 2025. In the past four years on TikTok, videos tagged #AnalogLife—cataloging users’ embrace of old technology, physical media and low-tech lifestyles—received over 76 million views.

And last month, Architectural Digest reported on nostalgia for old-school tech : “landline in hand, cord twirled around finger.”

Catherine Price, author of “ How to Break Up With Your Phone,” calls the trend heartening.

“People are waking up to the idea that screens are getting in the way of real life interactions and taking steps through design choices to create an alternative, places where people can be fully present,” said Price, whose new book “ The Amazing Generation ,” co-written with Jonathan Haidt, counsels tweens and kids on fun ways to escape screens.

From both a user and design perspective, the Pattersons consider their analog room a success.

Freed from the need to accommodate an oversize television or stuff walls with miles of wiring, their design team—BarnesVanze Architects and designer Colman Riddell—could get more creative, dividing the space into discrete music and game zones.

Ellen’s octogenarian parents, who live nearby, often swing by for a round or two of the Stock Market Game, an eBay-sourced relic from Ellen’s childhood that requires calculations with pen and paper.

In the music area, James’s collection of retro Fender and Gibson guitars adorn walls slicked with Farrow & Ball’s Card Room Green , while the ceiling is papered with a pattern that mimics the organic texture of vintage Fender tweed.

A trio of collectible amps cluster behind a standing mic—forming a de facto stage where family and friends perform on karaoke nights. Built-in cabinets display a Rega turntable and the couple’s vinyl record collection.

“Playing a game with family or doing your own little impromptu karaoke is just so much more joyful than getting on your phone and scrolling for 45 minutes,” said James.

The Patterson family’s basement retreat ‘encapsulates the joy in the things that we love in one room.’ John Cole

Screen-Free ‘Escapes’

“Dumb” design will likely continue to gather steam, said Hans Lorei, a designer in Nashville, Tenn., as people increasingly treat their homes “less as spaces to optimise and more as spaces to retreat.”

Case in point: The top-floor nook that designer Jeanne Hayes of Camden Grace Interiors carved out in her Connecticut home as an “offline-office” space.

Her desk? A periwinkle beanbag chair paired with an ottoman by Jaxx. “I hunker down here when I need to escape distractions from the outside world,” she explained.

“Sometimes I’m scheming designs for a project while listening to vinyl, other times I’m reading the newspaper in solitude. When I’m in here without screens, I feel more peaceful and more productive at the same time—two things that rarely go hand in hand.”

A subtle archway marks the transition into designer Zoë Feldman’s Washington, D.C., rosy sunroom—a serene space she conceived as a respite from the digital demands of everyday life.

Used for reading and quiet conversation, it “reinforces how restorative it can be to be physically present in a room without constant input,” the designer said.

Laura Lubin, owner of Nashville-based Ellerslie Interiors, transformed a tiny guest bedroom in her family’s cottage into her own “wellness room,” where she retreats for sound baths, massages and reflection.

“Without screens, the room immediately shifts your nervous system. You’re not multitasking or consuming, you’re just present,” said Lubin.

As a designer, she’s fielding requests from clients for similar spaces that support mental health and rest, she said.

“People are overstimulated and overscheduled,” she explained. “Homes are no longer just places to live—they’re expected to actively support well-being.”

Designer Molly Torres Portnof of New York’s DATE Interiors adopted the same brief when she designed a music room for her husband, owner of the labels Greenway Records and Levitation, in their Lido Beach, N.Y. home. He goes there nightly to listen to records or play his guitar.

The game closet from the townhouse in “The Royal Tenenbaums”? That idea is back too, says Gachot. Last year she designed an epic game room backed by a rock climbing wall for a young family in Montana.

When you’re watching a show or on your phone, “it’s a solo experience for the most part,” the designer said. “The family really wanted to encourage everybody to do things together.”

Photo: John Cole

Analog Accessories

Don’t have the space—or the budget—to kit out an entire retro rec room?

“There are a lot of small tweaks you can make even if you don’t have the time, energy or budget to design a fully analog room from scratch,” said Price.

Gachot says “the small things in people’s lives are cues of what the bigger trends are.”

More of her clients, she’s noticed, have been requesting retrograde staples, such as analog clocks and magazine racks.

For her Los Angeles living room, chef Sara Kramer sourced a vintage piano from Craigslist to be the room’s centerpiece, rather than sacrifice its design to the dominant black box of a smart TV. Alabama designer Lauren Conner recently worked with a client who bought a home with a rotary phone.

Rather than rip it out, she decided to keep it up and running, adding a silver receiver cover embellished with her grandmother’s initials.

Some throwback accessories aren’t so subtle. Melia Marden was browsing listings from the Public Sale Auction House in Hudson, N.Y. when she spotted a phone booth from Bell Systems circa the late 1950s and successfully bid on it for a few hundred dollars.

“It was a pandemic impulse buy,” said Marden.

In 2023, she and her husband, Frank Sisti Jr., began working with designer Elliot Meier and contractor ReidBuild to integrate the booth into what had been a hallway linen closet in their Brooklyn townhouse.

Canadian supplier Old Phone Works refurbished the phone and sold them the pulse-to-tone converter that translates the rotary dial to a modern phone line.

The couple had collected a vintage whimsical animal-adorned wallpaper (featured in a different colourway in “Pee-wee’s Playhouse”) and had just enough to cover the phone booth’s interior.

Their children, ages 9 and 11, don’t have their own phones, so use the booth to communicate with family. It’s also become a favorite spot for hiding away with a stack of Archie comic books.

The booth has brought back memories of meandering calls from Marden’s own youth—along with some of that era’s simple joy. As Meier puts it: “It’s got this magical wardrobe kind of feeling.”

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