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, with CoStar’s September rent data lists San Jose as one of the highest-priced rental markets in the country, with average asking rents of $3,219. These data points reflect ongoing demand in the region’s rental housing market.

San Jose’s multifamily sector continues to show signs of strengthening. In September 2025, the annual rate of rent growth reached 3.7%, the highest level since February 2023. While it is typical to see a seasonal dip in demand in September, this year’s monthly decline of 40 basis points was notably smaller than the 60 to 70 basis point drops seen in each of the past three years. Continued solid annual rent growth highlights the strong demand for apartments in the region, with renters quickly absorbing a robust pace of new deliveries.

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.