Three Multifamily Market Trends from the Second Quarter of 2025
Each quarter, through its Multifamily Market report, the research team at Virginia REALTORS® analyzes the trends and changes in the multifamily market. Here, we share the key insights from the most recent report for the second quarter of 2025.
Delivery of new multifamily units slowed significantly in the second quarter of 2025, and the construction pipeline continues to get smaller.
There were 21,854 multifamily units under construction in Q2 2025, almost 20% lower compared to the same time last year. Among the metro areas, Northern Virginia and Richmond had the largest share of new multifamily construction in the commonwealth. At the same time, deliveries slowed, with only 2,024 multifamily units delivered in Q2 2025, which was just half of the number of units delivered during the same time last year.
Multifamily vacancy rates went down slightly in Virginia’s rental market.
The vacancy rate in Virginia’s multifamily market decreased to 6.1% in the second quarter of 2025, down from 6.2% during the same time last year. Vacancy rates for garden/low rise (5.3%) multifamily units inched down slightly, while the vacancy rate for mid/high rise (7.3%) units remained unchanged compared to the previous year. The metro market with the highest vacancy rate in the state was Lynchburg, which had a lot of new units delivered over the last few quarters, at 10.9%, and Winchester had the lowest vacancy rate at 3.0%. With a slowdown in the supply side of the market, we expect vacancy rates to hold steady around current levels.
Rental prices continued their upward trajectory.
The average effective rent per unit in Virginia was $1,826 in Q2 2025, increasing 2.5% from the same time last year, signifying that rental prices continue to rise. Rental prices went up in all nine metro areas of the commonwealth. Charlottesville topped this list by representing a 4.9% increase in rent while Richmond had the slowest increase in rent of 2.0%.