Phoenix apartment rents edge down in August

Article originally posted on CoStar on September 11, 2026

Phoenix apartment rents slipped modestly in August, extending a multiyear stretch of soft conditions, but underlying market conditions suggest the sector may be turning the corner.

Average asking rents declined 0.1% in August, bringing year-to-date growth to 0.3%. While still a subdued performance by historical standards, the market’s pricing trajectory has improved notably compared with recent years. Through the first eight months of 2025, asking rents had fallen 1.4%, while rent growth was essentially flat over the same period in 2023 and 2024.

The contrast with 2025 is particularly striking. Last year, rents posted monthly declines in seven of the first eight months and entered the fall leasing season already under pressure from a wave of new supply. While rent growth remains weak, Phoenix has managed to avoid a similar pattern in 2026.

The improvement comes as apartment demand has accelerated to record levels. More than 13,000 units of net absorption were recorded during the first half of the year, the strongest demand performance in the opening six months of the year in market history. Importantly, renter demand exceeded new apartments coming online by a meaningful margin, allowing vacancy rates to inflect and begin moving lower after several years of steady upward pressure.

Phoenix is not out of the woods yet. Seasonal leasing patterns typically weaken during the final months of the year, and modest rent declines remain. Even if asking rents finish 2026 in negative territory, however, the magnitude of losses is expected to be far less severe than those recorded last year.

In many respects, the market’s current position can be described as better, but not yet good.

Asking rents remain below peak levels reached during the pandemic-era apartment boom, and landlords continue to rely on concessions in many parts of the metropolitan area to attract residents. But after consecutive years of broad-based rent erosion, simply returning to positive year-to-date growth represents a meaningful step toward recovery.

Signs of improvement are becoming increasingly evident in select subsections. Parts of the East Valley, including Gilbert and Chandler, as well as North Scottsdale and Old Town Scottsdale, have already returned to positive annual rent growth.

Those areas benefit from a combination of affluent household bases, concentrations of high-paying employers and comparatively limited new apartment construction. These stout underlying demand dynamics have helped absorb available inventory more quickly than other portions of the Valley have.

While a full recovery remains a work in progress, August’s modest setback does little to alter the broader narrative. For the first time since the downturn began, Phoenix apartment factors are moving in the right direction, though a long and uneven road to recovery could still be in store.