The headline looks encouraging. National multifamily rents grew 0.6 percent year over year in January, according to the latest CoStar data, pushing the average asking rent to $1,713 and ending five consecutive months of flat or declining figures. That positive trendline is real, but it masks a split-screen rental market where geography determines almost everything. For owners in Charlotte and Raleigh, the national number is not your number.
Both metros sit squarely in the South region, which posted a negative 0.2 percent rent growth annually. That puts the Carolinas in the same camp as the Sun Belt and Mountain West markets absorbing the worst of the 2023-2024 construction wave, a supply surge that crested nationally in 2024 and is still working its way through the system. The bottom five markets right now are Austin (down 4.8%), Denver (down 3.3%), Phoenix (down 3.3%), San Antonio (down 3%), and Tampa (down 2.7%). Charlotte and Raleigh are not at the absolute bottom, but the regional trend line points in the same direction.
What Actually Drove the National Increase — And Why It Doesn’t Apply Here
The markets leading rent growth share one defining characteristic: they did not overbuild. San Francisco topped the national chart at 6.3 percent annual growth, followed by Norfolk at 4.3 percent and San Jose at 3.5 percent. The Midwest as a whole grew 2.1 percent, with Chicago posting 2.3 percent. These markets benefit from constrained supply pipelines and relatively strong employment bases. Limited inventory plus steady demand equals pricing power.
The Carolinas took the opposite path. Both Charlotte and Raleigh ran some of the most aggressive development pipelines in the country during the 2021-2023 boom. New supply absorbed demand quickly and then kept coming. The result is a market where landlords are competing for a resident pool that has more choices than at any point in recent memory.
The Vacancy Math Most Owners Underestimate
Here is where we need to be direct with Charlotte and Raleigh investors: the most expensive decision you can make right now is holding a rent price that the market won’t support.
We have tracked this for nearly two decades, and the math never changes. Vacancy costs $60 to $100 per day in lost income, carrying costs, and elevated maintenance risk (empty HVAC systems and water heaters fail at higher rates than occupied ones). An owner who holds firm at $2,200 per month and absorbs 60 days of vacancy to avoid dropping to $2,050 has already surrendered $4,200 to $6,000 in lost income — to “save” $150 per month. At that pricing gap, the payback period for the vacancy loss is 28 to 40 months. That owner will not break even on their stubbornness for over two years.
Meanwhile, the resident who would have taken $2,050 in month one is now signing somewhere else.
The real cost equation:
- 60 days vacant at $80/day average = $4,800 in carrying costs
- $150/month rent reduction over 12 months = $1,800 annual impact
- Net cost of waiting: $3,000 in year one alone, before accounting for quality of applicant
OVERPRICING ATTRACTS BETTER RESIDENTS: FALSE
This is the most persistent myth in residential property management, and it costs mom-and-pop investors real money every year. The logic sounds intuitive: charge more, get higher-quality residents. The data says the opposite.
Quality residents, people with strong credit, stable employment, and a track record of caring for a home, have options. They do their research. They recognize market-rate pricing and treat above-market pricing as a signal that something is off, or simply move on. The applicant pool that remains after quality residents have filtered you out skews toward people making financially stretched decisions. That is not the foundation of a profitable long-term tenancy.
Competitive pricing, on the other hand, generates volume. Volume means selection. Selection means you can choose the strongest application from five qualified candidates rather than the least-bad application from two marginal ones. In a soft market like Charlotte and Raleigh right now, pricing discipline is not a concession — it is the primary lever for resident quality.
What the Recovery Timeline Looks Like
The supply wave that has weighed on Southern markets is declining. CoStar’s data confirms new deliveries have been falling since their 2024 peak. That is genuinely good news for owners who can sustain their positions. The question is whether you can absorb 12 to 24 more months of softer conditions without making expensive mistakes in the meantime.
The Midwest’s outperformance offers a clear preview of where the South will eventually land once supply normalizes. Chicago didn’t do anything especially clever — it simply didn’t overbuild. The same demand drivers (jobs, population movement, the structural undersupply of for-sale housing) that will ultimately support Charlotte and Raleigh rents are already in place. The FED’s sustained focus on shelter inflation as a core CPI component means rate relief, when it comes, will have an outsized positive effect on markets like ours where demand has been quietly building behind a wall of new supply.
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The Actionable Position for Carolina Owners Right Now
Owners who price accurately, maintain property condition, and place quality residents today are building the compounding advantage that will matter most when the market tightens. A resident who signs a well-priced lease in a soft market tends to stay. Turnover in a recovering market means re-leasing costs, potential vacancy, and missing the upswing entirely.
The national headline of 0.6 percent growth is a signal that the floor is in for multifamily nationally. For Charlotte and Raleigh specifically, the path back to pricing power runs through supply absorption — and that process is well underway. The owners who will benefit most from the recovery are the ones who didn’t bleed out during the soft period by chasing a rent number the market wouldn’t pay.
Price accurately. Place well. Hold the asset. That is the entire strategy.
For more information, visit January Report: Rents Rise by 0.6% | Apartments.com.
