Apartment rents drop further with vacancies at record highs, but single-family rentals tell a very different story

National apartment vacancy just hit 7.4%, a record in Apartment List’s index going back to 2017. Rents have fallen nearly 6% from their 2022 peak. Units are sitting on the market an average of 40 days before leasing. And yet, if you own a well-located single-family house or townhome, you are living in a fundamentally different market. We need to talk about why.

We manage rental properties across seven metro markets in the Sunbelt, including Charlotte, Atlanta, and Nashville. We do thousands of rental market estimates every year. And the story those estimates are telling right now is one of stark bifurcation: the apartment and condo market is in serious distress, while single-family houses and townhomes continue to hold up with far more resilience than most industry headlines would have you believe.

That distinction matters enormously for landlords trying to make smart decisions with their investment dollars. The national media is understandably focused on the dramatic numbers coming out of the apartment sector, because those numbers are dramatic. But painting the entire rental market with that same brush is lazy, and it leads to bad decision-making.

The apartment market by the numbers: it is rough out there

The data is sobering. According to Apartment List’s latest reporting, the national median apartment rent has dropped to roughly $1,353, down 1.5% year over year and more than 5.9% below the mid-2022 peak. The multifamily vacancy index has climbed to 7.4%, the highest reading in the history of the dataset. Units are taking an average of 40 days to lease after being listed, which is more than double the pace seen during the 2021 frenzy.

The cause is straightforward supply math. In 2024 alone, over 600,000 new multifamily units were delivered, the most in a single year since 1986. While 2025 and 2026 are tapering, the pipeline remains above historical averages. All of those units are now competing for residents at the same time that demand from younger renters, the core apartment demographic, has softened due to a shakier labor market and broader economic uncertainty.

The hardest hit metros are places where apartment construction went into overdrive during the pandemic era. Austin leads the decline with rents down nearly 6% year over year and a staggering 20% below its 2022 peak. Denver, Phoenix, Tampa, San Antonio, and New Orleans are all posting significant drops. These are all markets that saw enormous multifamily permitting activity, and now the piper is being paid.

Our Sunbelt markets, including Charlotte and Atlanta, are listed among the oversupplied apartment markets by multiple research firms. Charlotte in particular saw a wave of luxury apartment construction that is now competing aggressively for a resident pool that simply has not kept pace. We are seeing the effects of this directly in our multifamily operations.

The single-family and townhome story is fundamentally different

Here is where the conversation gets much more nuanced, and where most of the media coverage falls short.

Single-family rental homes and townhomes have not experienced anything close to the supply surge that has hammered apartments. While 2024 delivered over 600,000 new apartment units, the single-family rental supply has actually been contracting. According to Redfin, only about 14% of single-family homes are occupied by renters today, the lowest share on record. The total number of single-family rentals has declined from 15.2 million to roughly 11.3 million in recent years as owners either sold to occupants during the pandemic boom or took advantage of price appreciation to cash out.

The result is a fundamentally tighter supply picture for houses and townhomes compared to apartments. In Denver, a market experiencing significant apartment distress, single-family vacancy is running around 4% while apartment vacancy sits at 7.6%. That is not a modest difference. Those are two entirely different investment environments operating in the same ZIP code.

Zillow’s data shows single-family rents at approximately $2,174 per month nationally, a 20% premium over the typical apartment, and that gap is the largest ever recorded. Zillow’s March 2026 forecast projects single-family rents growing at 1.8% for the year, compared to just 0.9% for multifamily. That may sound modest, but in a market where apartments are posting negative numbers, it represents a massive relative outperformance.

The resident profile explains much of this. Families with children, pet owners, people who work from home, and residents who have established roots in a neighborhood are overwhelmingly drawn to houses and townhomes. These residents stay dramatically longer. Our own data shows average lease terms well above the industry single-family average, and every additional year a quality resident stays in place compounds your returns through avoided vacancy, avoided turnover costs, and avoided re-leasing risk.

Condos: caught in the worst of both worlds

We outlined roughly a decade ago that condos would likely underperform the broader rental market due to the relentless flow of new apartment competition, and that prediction has proven accurate in a way that even we did not fully anticipate.

Condos are structurally disadvantaged in the current environment for several reasons that compound on each other. They compete directly with the flood of new luxury apartments that offer modern amenities, concierge services, and move-in concessions. They carry HOA dues that have escalated sharply with inflation, often adding $300-$500 per month to an owner’s cost basis without proportionally increasing rental rates. They are loaded with high-maintenance amenities like pools, elevators, game rooms, and fitness centers that require constant and increasingly expensive upkeep.

The WSJ has reported on condo market weakness being the worst in over a decade. Condo presales in major markets have collapsed. Developers are converting planned condo projects to rental buildings because the buyer market is so weak. In Toronto, condo prices have fallen nearly 30% from their peak. While our U.S. Sunbelt markets have not seen that severity, the direction is the same.

New construction is not the safe bet most investors think either

Another pattern we are seeing clearly in our markets: brand-new construction rentals are not performing as well as many owners expected, especially relative to more mature, well-maintained homes in established neighborhoods.

This is counterintuitive to most landlords, so it deserves explanation. New construction in the single-family and townhome space often comes with higher price points, less established neighborhoods, and HOA structures that include amenities renters may not value enough to pay a premium for. Meanwhile, a renovated home in a 15 or 20-year-old neighborhood with mature landscaping, established schools, and a track record of community stability frequently generates equal or better traffic at a lower cost basis for the investor.

We showed this in our analysis of fenced properties versus unfenced new construction with pools and high HOA dues. Properties in 20-year-old neighborhoods with fences and reasonable presentations were generating double and triple the inquiry traffic of brand-new homes loaded with amenities. The practical appeal of a fenced yard, particularly for families and pet owners, consistently outperforms the flashy appeal of a community pool that adds $400/month in HOA dues.

In a high-inflation environment where labor costs, material costs, and maintenance expenses are all elevated, the investor who chooses low-maintenance durability over high-cost amenities will win over the long run. That is a mathematical certainty, not an opinion. A fence costs $5,000-$20,000, provides benefits for nearly 30 years, requires almost no maintenance, and delivers a direct payback period of under 5 years through reduced vacancy and enhanced rental rates. Compare that to a community gym or pool that bleeds money every single month.

What this means for landlords in our markets

Charlotte, Atlanta, Nashville, and our other Sunbelt metros are all experiencing the apartment oversupply phenomenon. That is real. But the single-family and townhome segment in these same metros is holding up far better, and in many submarkets is performing quite well.

The key takeaways for landlords in 2026 are these:

If you own a single-family house or townhome in an established neighborhood, your asset is far more insulated from the current apartment distress than the headlines suggest. Your supply-side dynamics are favorable. Your resident retention profile is strong. Your competition is limited. Price your property competitively, maintain it well, keep your quality residents happy, and the math works in your favor over any reasonable time horizon.

If you own a condo, you need to be realistic about where you sit in the competitive landscape. You are competing against a tidal wave of new apartments and you are doing it with a cost structure (HOA dues, special assessments, amenity maintenance) that eats into your net operating income relentlessly. The honest assessment is that condos in most of our markets face continued headwinds for at least the next 12-18 months, and the long-term structural disadvantages are not going away.

If you are considering a new investment, the data strongly favors established single-family homes and townhomes over new construction in amenity-heavy communities. The purchase price may be similar, but the operating cost profile, the resident retention rate, and the competitive positioning are all materially better for mature properties in proven neighborhoods.

The vacancy cost reminder that never gets old

We write about this constantly because landlords consistently underestimate it. In our markets, vacancy costs $60-$100 per day. That is not just the lost rent. It includes utilities on an empty home, lawn care, insurance exposure, HOA dues still accruing, and the compounding risk of a home sitting vacant during the wrong season.

If your property sits empty for 60 days because you refused to price it competitively, you have burned through $3,600-$6,000 in real costs. To make that money back through a higher rental rate, you would need to charge an additional $300-$500 per month for an entire year. And here is the part that most landlords struggle with: the higher you price, the longer you sit, and the longer you sit, the more likely you are to attract a resident who is desperate rather than discerning. Quality residents find value. They are shopping smart. They are not paying above market, and they do not need to.

In a market where apartments are offering concessions and dropping rents, your single-family or townhome has a natural advantage. Do not squander it by overpricing and sitting empty while good residents lease the home next door.

The bottom line

The apartment market is in real trouble. Record vacancy, falling rents, oversupply that will take at least another 12-18 months to absorb. Condos are caught in the crossfire, competing against those apartments with a worse cost structure. New construction in high-amenity communities is underperforming mature, established neighborhoods.

But single-family houses and townhomes? They are operating in a different market with different supply dynamics, different resident profiles, and a fundamentally stronger long-term position. The rental premium for single-family homes over apartments is at a record high for a reason: renters want space, privacy, yards, and stability, and there simply are not enough houses available to rent.

For landlords who own single-family and townhome rentals in our Sunbelt markets, the immediate task is straightforward. Price competitively, maintain the property, invest in durable improvements like fences that compound value over decades, and treat your residents like the long-term business partners they are. Do that, and the current apartment distress is not your crisis. It is your competitive moat.

For investors evaluating new opportunities, the data is pointing clearly toward established single-family homes in proven neighborhoods. The flashy new apartment complex with a rooftop pool might look exciting, but the 15-year-old house with a fenced yard and a school district families love will outperform it on net operating income almost every single time.

We have been in this business for nearly two decades, and we have seen these cycles before. The investors who focus on bottom-line results rather than top-line vanity metrics, who price for quality residents rather than maximum asking rent, and who play the long game with durable assets in good locations are the ones who build real, lasting wealth. That was true in 2008, it was true in 2020, and it is true today.