Phoenix apartment rents post consecutive monthly declines

Following modestly positive performance through the first few months of the year, Phoenix multifamily rents retreated in the second quarter.

The average asking rent fell 0.1% in June, matching May’s decrease and marking the third-straight month without positive movement. As a result, the Valley notched a 0.2% decline in asking rents during the second quarter of 2026. While underwhelming for a market that averaged 1.5% growth in the second quarter from 2017 to 2019, this year is outperforming the same time in 2025, when rents fell 0.7%.

Performance was uneven across quality segments, with properties on the lower end notching the largest rent cuts.

Among one- and two-star properties, average asking rents fell 0.6% in the second quarter of 2026. Operators of those properties are competing with middle-priced complexes, where generous concession packages and ongoing rent declines may be enough to pull renters up the quality spectrum.

Renters of one- and two-star properties are also the portion of the renter base that faces the most affordability pressure. Higher costs for food, energy and other nondiscretionary spending categories are likely squeezing the budgets of lower-income households, making it difficult for them to absorb higher rents.

At luxury four- and five-star apartments, asking rents fell just 0.1% in the second quarter, with three-star properties recording a 0.2% decline.

In addition to falling asking rents, the use of concessions to attract renters remains widespread in Phoenix. While the pace of new apartment completions is slowing, vacancy remains near the highest level since the recovery of the Great Recession, keeping competition for renters broadly elevated.

The share of apartments offering some form of discount rose to about 70% in the second quarter, the highest level since at least 2020. Four to eight weeks of free rent is common at stabilized properties, with discounts often extending to 10 weeks or more at newly built apartments in high supply pockets of the Valley.

Moving forward, rents are expected to remain under pressure throughout the year. Though underlying demand figures have been healthy, the glut of excess inventory accumulated over the past few years remains a considerable headwind.

As a result, a fourth-consecutive year of negative rent growth is likely in store, and a reduction in the frequency or magnitude of concessions may not materialize until 2027.