LA Apartment Rent Growth Stalls for Third Straight Year

The Los Angeles multifamily housing market is still struggling to achieve substantial rent growth momentum. Annual rents saw a minimal rise of just 0.1% in 2025, marking the third consecutive year with less than 1% growth. This increase was even lower than in previous years, which recorded rent growth rates of 0.5% in 2023 and 0.9% in 2024.

The most recent decline in rental rates of -0.3% occurred in 2020, when residents were under lockdown from the COVID-19 pandemic — followed by a notable rebound, to 5.4%, due to pent-up demand. Since no anticipated events are likely to trigger a significant increase in demand this year, forecasts for 2026 predict a modest decline of rent growth of -0.2% by year's end.

Weak demand and rising supply have been the main contributors to softer market fundamentals. In 2025, only 2,750 units were absorbed — the second-lowest number since 2020. The 10-year average for annual absorption is 7,800 units. The Los Angeles economy is contending with elevated unemployment, weak job growth and an outmigration of population, which are all contributing factors to stagnant demand.

On the supply side, 2025 saw a 14% increase over 2024, with 10,400 units completed — slightly above the past decade’s annual average of 9,800, and much higher than the previous 10 years, 2006-2015, which averaged just 4,000 new units annually.

Luxury apartments, rated four and five stars, experienced the biggest drop in rent, decreasing by 0.6% in 2025, reversing the small gain of 0.4% seen in 2024. Mid-tier three-star apartments showed a modest positive rent growth of 0.2%, and lower-tier one- and two-star properties had the highest increase at 0.7%.

Looking ahead, the number of units coming to market is expected to fall, as elevated interest rates have kept both new construction starts and units being built at their lowest level this decade. Rent growth is projected to remain negative throughout 2026 while the market continues to work through the excess supply from recent years, with expectations for a return to positive growth in 2027.