January 13, 2026

Population growth in Orlando pushing multifamily rents higher

Q3 2025

The Orlando multifamily market continued to post mixed property performance during its expansion phase. Area vacancies have increased, but strong demand has supported rent gains for the past several quarters. During the five-year period ending in 2024, the population in the Orlando metro area spiked by 12.7%, one of the fastest rates of expansion for large markets in the country. This ongoing population growth continues to support net absorption, which has totaled approximately 9,000 units during the past 12 months. While demand remains elevated, the pace of new supply has declined from the peak in 2023. The current construction pipeline contains roughly 25% fewer units than it did one year ago. With supply and demand coming more in balance, vacancy should begin to trend lower in the coming periods.

Investment activity accelerated materially in the third quarter of 2025 as quarterly transaction volume reached its highest level since 2022. During the third quarter, transaction activity was dominated by large Class A and Class B properties built since 2000, and nearly all of the assets that traded sold for more than $50 million. Despite the recent surge in sales of newer vintages, the median per-unit price has declined this year, consistent with a downward pricing trend that has persisted since 2022. This pricing adjustment reflects the current cap rate environment. Since 2022, cap rates have increased by roughly 100 basis points, with multifamily assets currently trading at average cap rates of approximately 5.0% to 5.5%, depending on asset class and submarket.

Looking ahead

As new supply moderates and demand remains elevated, Orlando multifamily fundamentals are positioned to strengthen. The number of units scheduled to come online in 2025 will represent a 17% decline from the 2024 total and signal the beginning of a downward trend in completions that is likely to persist in the coming periods. Sustained demand should support lease-up velocity for recently delivered Class A assets in high growth submarkets such as Kissimmee and Osceola, while preserving strong occupancy across Class B and C properties in submarkets like Northwest Orlando. As new supply tapers, vacancy is expected to remain flat at 8.7% during the fourth quarter, before declining as new residents drive apartment leasing. Rent growth is forecast to outperform the national average, with average asking rents projected to increase 2.1% by year end.

Cap rates are expected to remain relatively stable near current levels of approximately 5.0% to 5.5%, though anticipated declines in interest rates could support modest cap rate compression in 2026. As one of the fastest-growing metropolitan areas in the nation, Orlando continues to offer upside opportunities for multifamily investors. Motivated sellers and discounted pricing are creating selective acquisition opportunities, particularly for well-located assets serving the region’s expanding workforce. Over the medium term, ongoing infrastructure investment and major employment announcements reinforce Orlando’s long-term growth outlook and support sustained demand for multifamily housing.