Housing analyst Nicholas Gerli says America’s apartment market is moving through its sharpest downturn in years, with falling rents, large leasing concessions, rising vacancies, and growing mortgage stress placing some landlords and developers at risk of default.
In a report for his YouTube channel Reventure Consulting, Gerli pointed to multifamily delinquency data connected to Fannie Mae and Freddie Mac, arguing that apartment owners are facing the combined pressure of weaker demand and much higher refinancing costs.
He said the decline is most severe in Sun Belt and Mountain West markets that built aggressively during and after the pandemic, expecting migration into cities such as Austin, Nashville, Phoenix, Denver, Tampa, and Orlando to remain unusually strong.
Instead, migration into the South has fallen dramatically from its pandemic peak. Gerli described the shift as a structural change that could push troubled apartment projects toward foreclosure or bankruptcy while also placing downward pressure on home prices.
For renters and buyers, that may produce welcome relief. For highly leveraged landlords, however, the same adjustment could become financially devastating.
Apartment Owners Are Offering Months of Free Rent
Gerli opened his report in Nashville, where he showed newer apartment buildings advertising three free months on a 12-month lease.
That concession effectively reduces the annual rent by 25%, even when the advertised monthly price remains unchanged.
Another building was offering 15 weeks free, nearly four months of rent and a discount of roughly 31% over a one-year lease.
Gerli said landlords often prefer these incentives to openly reducing the listed rent because concessions allow them to preserve the appearance of higher pricing.
The difference is mostly cosmetic for tenants. A renter receiving three free months is paying substantially less over the year, regardless of what appears on the standard price sheet.
According to Gerli, apartment concessions have reached their highest level since around 2010, while some buildings that opened several years ago are still relying on large giveaways to attract residents.
That is an important warning sign. Temporary incentives are common when a new building opens, but continued concessions years later suggest the property has struggled to reach the occupancy and revenue projected by its developers.
Rents Have Fallen Across Major Sun Belt Markets
Using Apartment List figures, Gerli said Austin had experienced the largest decline, with apartment rents falling about 21% from their mid-2022 level and returning close to where they stood before the pandemic.
He identified Fort Myers, Colorado Springs, North Port, Sarasota, Phoenix, San Antonio, Lakeland, Raleigh, Denver, Orlando, and Atlanta as other markets with double-digit asking-rent declines.
Nashville, Charlotte, and Dallas were also approaching 10% reductions, before including the value of free-rent offers.
Once concessions are added, Gerli argued that effective rents in many fast-growing Southern and Western cities have dropped even further.
He linked those declines to falling home values.
In Austin, Gerli said rents were down about 21% while home values had declined roughly 26%. Around Cape Coral and Fort Myers, both rents and values had fallen by close to 18%.
His broader argument was that apartment rents provide a useful measure of real housing demand. When tenants are unwilling or unable to support high rents, first-time buyers are also less likely to accept mortgage payments that may cost far more than renting.
That relationship does not guarantee identical movements in every city, but it helps explain why weakening rental markets are often accompanied by rising home inventory and softer sale prices.
Migration Into the South Has Slowed Sharply
Gerli said overbuilding is only part of the problem.
Developers added a large number of apartments, but they did so while assuming that the pandemic-era flow of people into the South and West would continue.
According to the migration figures he discussed, movement into the Southern United States had fallen by roughly two-thirds from its 2022 level by 2025 and reached its lowest percentage rate in about 35 years.
The headline figure of an 80% collapse reflects the scale of the broader decline from peak migration conditions in some housing discussions, but Gerli’s presentation specifically described the regional fall as approximately two-thirds.
That distinction matters because the warning came from Gerli’s analysis of migration and mortgage stress rather than a direct declaration from Fannie Mae that an exact 80% collapse would cause mass bankruptcies.
Still, his central concern was clear: thousands of apartments were financed on the expectation that new residents would keep arriving, and that demand has weakened far faster than many projects were designed to withstand.
Nashville illustrates the change.
Gerli said the metro area had more than 11,000 houses, condominiums, and townhomes listed for sale by June 2026, the highest inventory level seen there in at least a decade.
With apartment buildings offering several months free, renters have less reason to purchase an overvalued home and double their monthly housing payment.
Multifamily Delinquencies Have Reached Recession-Era Levels
The most serious part of Gerli’s warning involved multifamily mortgage performance.
Citing delinquency data associated with Fannie Mae and Freddie Mac and displayed by the housing publication Calculated Risk, he said the share of large apartment mortgages at least 60 days delinquent had climbed to around one-half to eight-tenths of a percent.
Gerli said that was the highest level since the 2008 to 2010 housing crisis period.
The percentages may appear small, but large apartment loans are often worth tens or hundreds of millions of dollars. A relatively modest increase in the delinquency rate can therefore represent significant financial distress.
Many owners borrowed during the low-interest-rate period of the pandemic, when financing could be obtained at rates near 2% or 3%.
Those loans are now reaching maturity.
Refinancing at approximately 6%, while rents and occupancy are falling, can sharply increase monthly debt costs at the same time that property income is declining.
Gerli said some buildings simply no longer produce enough revenue to support the debt used to construct or purchase them.
That is the mechanism behind his bankruptcy concern. It is not falling rent alone, but falling rent combined with refinancing risk, excess supply, high operating costs, and weaker migration.
The Midwest and Northeast May Be Regaining Demand
While the Sun Belt cools, Gerli said an unexpected shift is occurring in parts of the Midwest and Northeast.
Apartment rents had risen most strongly since 2022 in cities such as Chicago, Hartford, Madison, Buffalo, Milwaukee, Omaha, Wichita, Kansas City, Rochester, and Providence.
Chicago led the group with rent growth of about 13.6% between August 2022 and June 2026, according to the Apartment List data he cited.
These are not the cities normally portrayed as the country’s fastest-growing migration destinations.
Gerli said the Midwest recorded positive domestic migration in 2025 for the first time in roughly 35 years, closing much of the historic gap with the South.
He suggested that affordability, manufacturing investment, data-center construction, and a desire to move closer to family may be drawing people back to regions that lost residents for decades.
The theory remains Gerli’s forecast, not a settled long-term trend. One year of improved migration does not guarantee that the Midwest will outperform the South for the next decade.
However, it does challenge the assumption that Americans will continue moving mainly toward Florida, Texas, Tennessee, Arizona, and Colorado regardless of price.
Renters May Gain While Landlords Face Losses
Gerli said the downturn could ultimately improve affordability in markets where both rents and home prices rose beyond local incomes.
More vacancies mean more competition among landlords. That can produce lower rents, larger concessions, and greater negotiating power for tenants.
He advised renters not to accept renewal increases automatically simply because a landlord asks for one.
A building may offer lower rent to incoming tenants while raising prices for existing residents who are less likely to move. Gerli recommended researching nearby listings, comparing similar units, and asking for lower rent or a free month before signing a renewal.
For buyers, the apartment downturn may provide another reason to wait in cities where renting is substantially cheaper than owning.
Gerli argued that sellers in those markets should not expect lower interest rates or a renewed migration boom to rescue inflated asking prices.
His position was blunt: prices will eventually have to move closer to what local incomes and rents can support.
A Housing Correction With Two Very Different Outcomes
Gerli sees the apartment decline as good news for people who were priced out during the pandemic but dangerous for owners who borrowed heavily at peak valuations.
Those outcomes can happen at the same time.
A tenant may receive a 25% effective rent reduction while the property owner falls behind on a multimillion-dollar mortgage. A homebuyer may gain bargaining power while a developer loses the equity invested in a project.
The term “mass bankruptcies” remains a forecast rather than an established result, and Fannie Mae’s delinquency figures do not by themselves prove that a broad wave is inevitable.
Yet the conditions Gerli identified are real within the framework of his report: concessions are widespread, rents have fallen sharply in several major markets, migration has slowed, inventories are rising, and multifamily delinquencies have reached levels not seen since the aftermath of the financial crisis.
If those pressures continue, the most overbuilt and highly leveraged markets may face years of adjustment.
For renters and buyers, that could mean cheaper housing and more choices. For landlords whose financial plans depended on endless population growth and permanently low interest rates, it could mean defaults, forced sales, or bankruptcy as the housing market resets around a much weaker level of demand.
A former park ranger and wildlife conservationist, Lisa’s passion for survival started with her deep connection to nature. Raised on a small farm in northern Wisconsin, she learned how to grow her own food, raise livestock, and live off the land. Lisa is our dedicated Second Amendment news writer and also focuses on homesteading, natural remedies, and survival strategies. Lisa aims to help others live more sustainably and prepare for the unexpected.
