The rental momentum in San Jose closed out 2024 on a high note and carried straight into the new year. According to Yardi Matrix’s National Multifamily Report from December 2024, San Jose posted a 2.1% year-over-year rent increase in December, ending the year with sustained rental demand in the region.

The upward trend has continued throughout 2025.  San Jose’s apartment market continues to outperform the broader U.S. rental landscape, posting steady gains despite ongoing economic headwinds. According to fourth-quarter 2025 data from CoStar, average asking rents reached $3,190 per month, representing 3.2% year-over-year growth and keeping San Jose ranked as the third most expensive multifamily market in the country, behind only New York and San Francisco.

This momentum highlights the region’s durable demand drivers, including Silicon Valley’s high household incomes and the widening affordability gap between renting and owning a home. Compared to national trends, San Jose’s premium remains significant: while U.S. average asking rents are approximately $1,756 per month, San Jose’s levels are nearly double. National rent growth slowed to 1.8%, contrasting with San Jose’s stronger 3.2% annual increase.

A sharp pullback in new construction continues to support this strength. Only 2,427 units are currently underway—about 1.5% of existing inventory—helping sustain upward rent pressure even as the broader market cools.

Roughly 4,500 new units were delivered over the past year, the highest annual total since 2014, and net absorption matched that figure, keeping the vacancy rate below 5%. 

Meanwhile, homeownership is becoming even more out of reach for many. In December 2024, the San Jose metro hit a record-high typical home value of $1.59 million, an increase of nearly 8 percent, or more than $100,000, year-over-year, the fastest growth among the nation’s 50 largest metro areas.

With home prices surging and rental supply still struggling to keep up with demand, pressure on San Jose’s rental market continues to intensify. Looking ahead, the market is expected to remain tight, with just 600 market-rate units slated for delivery over the next 12 months. That slowdown in new supply should support rapid leasing of recently completed projects and set the stage for continued rent growth. This reinforces the growing need for new multifamily housing to meet demand and ease the region’s ongoing housing crunch.