March 24, 2026

New supply growth continues to ease in St. Louis’ multifamily market

Q4 2025

St. Louis multifamily market overview

Operating conditions in the St. Louis multifamily market improved during the past year. This improvement was driven by consistent renter demand in the area, combined with decreasing new supply. Absorption in 2025 nearly matched the previous year’s levels, and compared to the trailing five-year average, net move-ins are up 7%. Deliveries continued to decline. Projects totaling approximately 2,400 units came online in 2025, down 13% from last year and lagging the 2022 peak by 50%. Asking rents are up, rising both quarterly and annually. This growth was driven by middle-tier and lower-tier properties, with combined rents in these assets rising by nearly 3.0% in the past year as vacancy held steady. The overall vacancy rate inched higher during the closing months of the year, though it stayed below year-end 2024 levels.

Multifamily investment activity cooled in 2025, though conditions remained healthy. Pricing was the strong point, with the median sale price rising considerably in the past year, reaching $169,100 per unit, up 20% from the previous peak recorded in 2023. The Mid County area continued to be one of the more active parts of the market, while North County, which contained 32% of all sales in 2024, recorded just two transactions in 2025. Activity picked up significantly in the Central West End submarket as well as in Jefferson County, specifically Fenton, with both of these submarkets accounting for roughly 20% of all multifamily sales each in the past year. Properties traded in a wide range of cap rates, generally from the low 5.0% to the low 7.0% range. However, the bulk of reported cap rates were in the mid 6.0% range.

Looking ahead:

The St. Louis multifamily market is poised for some modest improvement in 2026 as new supply continues to ease and renter demand persists. Developers are on track to deliver a comparatively light batch of units in 2026, marking one of the slowest years for construction in the past decade. This reduced pace of completions should help vacancy trend lower, supported by demand levels that have recently run ahead of longer term norms. Rents should gain some ground and the pace of increase in 2026 is expected to come in slightly faster than in the past year. With limited new supply and steady absorption, both vacancy conditions and rent growth should continue to trend on a positive path through the year, with the potential for further improvement extending into 2027.

Multifamily investment activity in St. Louis is expected to pick up in 2026, supported by healthy buyer interest and gradually improving property fundamentals. Trading patterns may shift again by submarket. The North County area will likely gain a greater share of activity than it had in 2025, becoming one of the more active submarkets in St. Louis like it had been in recent years. Downtown St. Louis should record a higher level of activity as well, while the neighboring Central West End submarket is positioned to remain an active area for investment, building upon its recent uptick in activity. While cap rates rose in the second half of 2025, that recent upward shift may prove to be temporary. Cap rates are expected to stay within a range of 5.0% and 7.0% throughout much of 2026.