📊🔥 “Why Class A Multifamily Is Still Outperforming: Rent Growth Surges While Class B & C Struggle” 🏙️

🏢📈 “Class A Apartment Rents Keep Rising in 2025 — Even as Occupancy Slips Behind Lower-Tier Units” 🚀

December 06, 2025•2 min read

🏢📈 “Class A Apartment Rents Keep Rising in 2025 — Even as Occupancy Slips Behind Lower-Tier Units” 🚀

📊🔥 “Why Class A Multifamily Is Still Outperforming: Rent Growth Surges While Class B & C Struggle” 🏙️

“Class A Rents Climb Higher Even as Occupancy Trails Lower-Tier Apartments”

The U.S. multifamily market continues to defy expectations in late 2025 — and nowhere is this more obvious than in the performance gap between Class A and lower-tier units. Despite historic levels of new apartment supply hitting the market, Class A rents continue to rise, even as occupancy now trails Class B and Class C communities for the first time in years.

Class A Holds Strong as New Supply Floods the Market

Developers have delivered more luxury units in the past 36 months than during any other three-year period in U.S. history. That surge has undeniably softened fundamentals, yet tenant demand for high-end product remains remarkably strong.

In October 2025:

·Class A occupancy: 94.6%

·Class B & C occupancy: 95%

While slightly below their historical averages, lower-tier apartments are now leading in pure occupancy for the first time since 2019.

Rent Growth Tells a Very Different Story

Nationwide effective asking rents fell 0.7% YOY, the sharpest drop in more than four years. But this decline is overwhelmingly concentrated in older inventory:

·Class C rents: ↓ 3.2% YOY — worst decline in nearly 14 years

·Class B rents: ↓ 0.6% YOY

·Class A rents: ↑ 1.4% YOY — marking 55 consecutive months of rent increases

Even with supply pressure, Class A continues to outperform due to:

✔️ Higher-income renter demand
✔️ Strong lease-up velocity in new builds
✔️ Amenity-driven value retention
✔️ In-migration to Sun Belt cities

In short, renters are still willing to pay for quality — even when cheaper options exist.

How the Rents Stack Up in October 2025

The pricing spread between luxury and workforce housing remains one of the most important investor indicators:

Asset Class

Avg. Monthly Rent

Class A

$2,370

Class B

$1,818

Class C

$1,521

That $560 Class A–Class B rent gap underscores both affordability challenges and persistent demand for premium space.

THE INVESTOR TAKEAWAY

Even as occupancy in Class A dips below Class B and C, premium pricing power remains firmly intact.

For investors, this means:

🔹 Class A resilience is real: rent growth continues despite supply pressure
🔹 Class B & C softness may offer value-add entry points
🔹 Luxury lease-ups are proving more durable than expected
🔹 Sun Belt and high-growth metros continue to outperform

With 55 straight months of Class A rent growth, the high end remains the most reliable revenue driver in an otherwise mixed apartment market.

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Bill Rapp, CRE Broker

I am a Houston commercial broker, with residential experience, as well as a lending background. I have been in the real estate industry for 14 years and counting, and I have worked in many roles within the industry and each has given me a unique perspective of the industry as a whole. My dedication to clients is rooted in this industry knowledge, but also includes my desire to go the extra mile in networking to source off market opportunities for my clients. Me and my team at eXp Commercial have a cutting-edge technology package that gets the widest exposure for each transaction. eXp Commercial offers a nationwide network through which we can deliver the best exposure and professional advice to achieve our clients’ goals while also minimizing their risk. Clients appreciate my methodical method of discovery in our initial consultation. Through which we can get to know each other and their specific’s business’s needs and objectives on a granular level. Our processes help navigate each transaction and its potential pitfalls through to a successful outcome for our clients. It is my stated goal to provide our clients with extensive market analysis and expertise that fosters innovative solutions and rewarding commercial real estate opportunities.

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