RealPage Year End Analysis: Structural Drivers Remain Strong to Support Long-Term Rental Housing Demand

Renter financial resilience shows improvement as wage growth outpaces rent growth

RICHARDSON, Texas–(BUSINESS WIRE)–RealPage®, a leading global provider of AI-enabled software platforms to the real estate industry, has released a comprehensive review of its 2025 market predictions.

The analysis shows that – while cyclical pressures such as a softening labor market have tempered recent demand – structural drivers remain strong. This includes favorable demographics and ongoing affordability challenges in the single-family market that will continue to support long-term rental housing demand.

The review highlights that while the supply wave was the dominant theme of 2024 and 2025, the market is shifting toward a new dynamic. Data indicates that despite the influx of approximately 500,000 new units delivered in 2025, strong wage growth and cooling inflation have supported robust absorption. However, RealPage sees an undersupply challenge beginning to reemerge as early as late 2026, given that new starts activity has fallen to its lowest level since 2012 due to elevated interest rates and construction financing challenges.

“Our analysis shows that the multifamily sector is behaving exactly as fundamental economics would predict,” said Carl Whitaker, chief economist at RealPage. “High-supply markets are experiencing continued rent contraction with deep concessions being offered to help absorb saturated lease-up inventories. Meanwhile, lower-supply regions continue to trend ahead of the national average, with limited slack in available units. While 2025 delivered another significant block of new inventory, the development pipeline has declined at its fastest pace in well-over a decade. By late 2026, the pullback in new starts could begin to set the stage for a renewed undersupply of rental housing.”

Key trends identified in the analysis include:

• Persistent Wage Growth: Wage growth persists across much of the renter base, particularly among households living in market-rate rental housing properties. As a result, affordability – as measured by the rent-to-income ratio – has improved to its healthiest level in nearly a decade.
• Divergent Rent Growth: A clear split remains between high-supply states, which currently hold nearly two-thirds of all units under construction, and low-supply markets. States with inventory growth above 3% – a pace slightly ahead of the national average – continue to see rental rates backtrack.
• Rising Concessions: While the share of properties offering discounts declined slightly year-over-year, the average discount among those properties increased, reaching levels not seen since the late 2000s.
• Class A Resilience: Occupancy rates in Class A properties are closer to Class B and Class C levels than at any point in the past decade. This reflects both recent supply impacts and a reduced spread between Class A and Class B property rental rates. Further, the considerable spread between cost of ownership vs. the cost of renting has translated to fewer move-outs to single family homes.

2026 Outlook

RealPage forecasts a growing number of markets shifting from oversupply toward more balanced supply-and-demand conditions in the second half of 2026. Current projections suggest that new multifamily deliveries could fall to roughly as few as 300,000 new units next year – well below the level the National Multifamily Housing Council estimates is required to satisfy demand through 2035.

At the same time, while some markets have experienced modest declines in single family home prices, a wide gap persists between average multifamily rental rates and typical mortgage payments. With mortgage rates holding above the 6% threshold, the current cost of renting remains significantly less expensive than homeownership. This makes it unlikely that a flood of renters will enter the single-family market over the next year.

A replay of RealPage Chief Economist Carl Whitaker’s detailed market analysis for 2025 and key indicators for 2026 can be viewed here. To learn more about RealPage market insights and analysis including the most recent multifamily housing data, visit our blog.

About RealPage, Inc.:

RealPage improves the business of living for both housing providers and residents. As the leading platform for AI-powered real estate operations, we connect property owners, operators, and residents across every stage of the rental journey – creating smarter, more transparent, and more responsive experiences. Our technology unifies marketing, leasing, operations, and financials, putting AI at the center of real estate. From automating work and turning data into actionable insights to introducing the industry’s first agentic AI workforce, we empower property teams to deliver exceptional living experiences. Through our resident experience platform, LOFT, and an integrated suite of services, RealPage gives millions of residents greater transparency, flexibility, and ease – helping them lease, live, and engage confidently in their communities. Backed by Thoma Bravo and recognized by Forbes, Newsweek, and EnergyStar for innovation, sustainability, and workplace culture, RealPage is headquartered in Richardson, Texas, with offices across North America, Europe, and Asia. We’re building the future of real estate by connecting technology, people, and communities.

Contacts

Jennifer Bowcock

Senior Vice President, Communications & Creative

RealPage

Jennifer.bowcock@realpage.com
408-768-8221