Updated August 2026
Recent CoStar data shows San Jose and the broader Silicon Valley market gaining momentum as rents rise, vacancy tightens, and construction continues to lag demand.
San Jose and the broader Silicon Valley multifamily market continue to show strong fundamentals relative to many U.S. apartment markets, based on recent third-party data from CoStar. Reported conditions include low vacancy, limited new construction, and renter demand tied in part to high-income technology and AI-oriented households.
CoStar's July 2026 Apartment Monthly Rent Report again showed San Jose ranking near the top of major U.S. markets for rent growth. San Jose apartment rents rose 0.39% month over month, second behind San Francisco's 0.59%, while annual rent growth accelerated to 6.8%, also second behind San Francisco. Nationally, rents were essentially flat for the month (+0.03%) and up 1.0% year over year, underscoring how far Bay Area rent growth is running ahead of the U.S. average.
Independent data points in the same direction. Apartment List's most recent national rent report shows the San Francisco and San Jose metros logging the nation's fastest year-over-year rent growth, at 7.4% and 6.1% respectively, while the national median rent was down 1.2% over the same period.
Across Santa Clara and San Benito counties, average apartment rents are reported to be near $3,400 per month, up from about $2,700 before the pandemic. According to CoStar forecasts cited in mid-2026 reporting, rents could approach $3,600 if current assumptions materialize, with projected rent growth of 6% to 7% over the next year. These are third-party forecasts and should not be viewed as a guarantee of future market performance or investment results.
Vacancy may also tighten further. CoStar projects apartment vacancy across Santa Clara and San Benito counties could fall to about 3% over the next two years, which would be among the lowest levels in more than a decade. If realized, lower vacancy and limited new supply could support continued rent growth, though actual results may differ from current forecasts.
The supply side remains the central constraint. Before the pandemic, apartment starts across the region averaged about 1,600 units per quarter. In the second half of 2024, the market recorded no new starts. Construction has since rebounded to about 1,050 starts in the latest quarter, but remains well below historic levels and is unlikely to provide meaningful near-term relief.
Overall, the latest July 2026 data suggests that San Jose's multifamily market remains supported by a favorable supply-demand backdrop. However, market forecasts are inherently uncertain and may be affected by employment trends, interest rates, capital market conditions, affordability constraints, operating costs, regulatory changes, and future construction activity.
Year-over-year rent growth reported by CoStar; #2 among major U.S. markets.
Approximate current average reported across Santa Clara and San Benito counties.
CoStar forecast over the next two years; not guaranteed.
Latest-quarter apartment starts reported by CoStar.
Market data and forecasts are based on third-party sources believed to be reliable but are subject to change. This summary is for informational purposes only and is not an offer to sell or a solicitation to buy securities, investment advice, or a guarantee of future results.
The latest CoStar monthly rent report shows San Jose near the top of major U.S. markets for month-over-month rent growth.
Source: CoStar Apartment Monthly Rent Report, July 2026
The year-over-year comparison from CoStar's July 2026 report also shows San Jose among the top-performing major apartment markets.
Source: CoStar Apartment Monthly Rent Report, July 2026
Apartment List's most recent national rent report — an independent data source from CoStar — also places the Bay Area at the top of U.S. rent growth rankings.
According to Apartment List's national rent report, the San Francisco and San Jose metros are logging the fastest year-over-year rent growth among the nation's large rental markets, at 7.4% and 6.1% respectively, while the national median rent declined 1.2% over the same period.
CoStar and Apartment List measure rents differently, so their figures are not directly comparable — but both currently rank San Jose second in the nation for year-over-year rent growth, behind only San Francisco. Third-party data is believed reliable but is subject to change and is not a guarantee of future results.
Source: Apartment List National Rent Report (apartmentlist.com/research/national-rent-data)
CoStar's June 2026 multifamily momentum analysis ranks San Jose near the top nationally based on rent improvement, vacancy improvement, supply-demand balance, and supply relief.
Source: CoStar, June 2026
San Jose improved across all four tracked momentum measures over the past year.
Source: CoStar, June 2026
Source: CoStar, June 2026
Source: CoStar, June 2026
Source: CoStar, June 2026
Source: CoStar, June 2026
Average rents across Santa Clara and San Benito counties are reported near $3,400 per month and could approach $3,600 if CoStar's forecasts materialize. CoStar projects vacancy could fall to about 3% over the next two years, which may support rental rates if current market conditions persist.
CoStar's updated multifamily momentum index shows San Francisco, San Jose, and the East Bay among the markets seeing notable improvement, based on demand, rent and vacancy trends, and changes in the construction pipeline.
Urban Catalyst is a San Jose–based private equity real estate firm developing multifamily and mixed-use projects in downtown San Jose. We monitor Silicon Valley apartment fundamentals — rents, vacancy, supply, and demand — to inform our development and investment decisions, and we update this report as new third-party data is released.
Explore our work: multifamily project portfolio, our team, and the latest market insights on our blog.
As of mid-2026, average apartment rents across the Santa Clara and San Benito county market are reported near $3,400 per month — roughly double the U.S. average — according to CoStar.
In CoStar's July 2026 Apartment Monthly Rent Report, San Jose rents rose 0.39% month over month and 6.8% year over year — the second-fastest among major U.S. markets in both periods, behind only San Francisco. Apartment List's independent national rent report also ranks San Jose second in the nation for year-over-year rent growth, at 6.1%.
San Jose's apartment vacancy rate is about 3.4%, and CoStar projects it could fall toward 3% over the next two years — among the lowest levels in more than a decade.
Yes. CoStar's June 2026 momentum analysis ranks San Jose the #2 most-improved multifamily market in the nation, with top-tier rankings for rent growth, vacancy improvement, and supply/demand balance.
CoStar projects San Jose rent growth of roughly 6% to 7% over the next year, supported by tight supply and limited new construction. Forecasts are third-party estimates and are not guaranteed.
Contact our team to learn more about Urban Catalyst's multifamily projects and future updates in Downtown San Jose.
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