Summary: The San Antonio Story at a Glance
- Strong underlying demand: Roughly 15,000 apartments were leased over the past year, while about 11,000 new units were completed. The market added more renters than housing—proof real demand still exceeds supply.¹
- Occupancy stability: Despite heavy deliveries, properties remain 93–94 percent occupied, showing a durable renter base.²
- Sharp construction pullback: Multifamily permits in San Antonio have fallen nearly 97 percent year-to-date (steepest drop among major Texas metros).³
- Rents near the bottom: Asking rents are ≈10 percent below 2022 peaks, and most forecasts call for 3–5 percent annual growth as new development slows.⁴**
- National snapshot: U.S. monthly rents fell 0.3 percent in September and annual growth slowed to 0.9 percent as supply remains high.⁶ This suggests the national market is bottoming out, not collapsing.**
- Near-term outlook: RealPage expects national rent growth to stay under 2 percent through mid-2026 as construction eases and absorption strengthens.⁷
Investor context: Among Texas markets, San Antonio combines lower replacement costs, strong rent elasticity, and limited pipeline risk—creating a cleaner setup for income and appreciation.⁵
Demand Is Outrunning Supply
Figure 1 “RealPage: Record Apartment Demand Outpaces Elevated Supply in San Antonio”
San Antonio’s demand story has been quietly impressive. RealPage reports that in the 12 months ending Q2 2025, the metro absorbed 15,083 apartments while 11,464 units were delivered.¹ That means more households moved in than units came online, which shows renters are still choosing San Antonio even amid a building boom.
RealPage notes that this absorption pushed total inventory up about 5 percent year over year, with most new supply in the New Braunfels–Schertz–Universal City corridor where around 3,000 units were completed.¹ Renewal activity also remained solid at roughly 51 percent in Q2 2025 as renters opted for stability despite pricing volatility.¹
Expanding industries such as logistics, health care, cybersecurity, and defense along I-35 continue to add steady employment. The cost of living remains around 30 percent below Dallas and less than half that of coastal metros, which keeps migration strong.⁸
Occupancy has stayed above 93 percent for three straight quarters, proving renter demand is resilient.² That matters because it shows the softness is cyclical, not structural. CoStar’s San Antonio Market Report (October 2025) echoes this trend, showing effective rent levels holding firm and occupancy stabilizing around 93 percent as new deliveries taper.¹³
Nationally, leasing is stabilizing even as supply unwinds, and RealPage expects equilibrium by 2026 as new starts decline and household formation stays positive.⁷
Rents Have Reset
Figure 2 “CoStar: Multifamily rents forfeit spring gains in San Antonio; Cooler fall looms”
Average asking rents are roughly 10 percent below 2022 peaks, creating a better entry point for investors.⁴ RealPage data show the metro’s average rent fell 3.5 percent year over year in Q2 2025, led by Class C assets where rents dropped 6.8 percent.¹¹ These discounts helped preserve occupancy and leasing velocity.
CoStar’s October update found San Antonio “forfeited spring gains,” with effective rents down 0.3 percent month over month and about 6 percent year over year, but described the trend as “a softer landing than feared as job growth underpins occupancy.”⁹ In other words, rents corrected but demand stayed intact because the labor market remains healthy. According to CoStar’s San Antonio Multifamily Market Report, Class A and B assets have begun to stabilize, and average effective rents are expected to rise modestly in 2026 as leasing incentives subside.¹³
To keep occupancy steady, many owners offered concessions. RealPage reports about 30 percent of San Antonio properties provided incentives averaging 8 to 10 percent off asking rents in mid-2025, but discounting has already eased as absorption strengthened.¹⁰
Nationally, rents also flattened in September, signaling a broad late-cycle stabilization after 18 months of supply pressure.⁶ This means San Antonio’s pattern fits the national reset phase rather than an outlier decline.
The potential for income growth now outweighs the remaining downside risk because pricing has already adjusted to sustainable levels.⁴ Buying during this reset phase lets investors enter at lower values while rents are still discounted.
Construction Pipeline Has Collapsed and Signals an Inflection Point
Developers have essentially stopped adding new projects in San Antonio. The Real Deal reported apartment permits plunged 96.6 percent in 2025, from 526 in 2020 to only 18 this year, the largest percentage drop among major U.S. metros.³ A local builder called it “the sharpest turn since 2009.”
RealPage and Census data show similar patterns regionally. Southern U.S. multifamily permits fell around 26 percent year over year, and projects under construction nationally are declining.⁷ This means the 2026–2027 delivery pipeline will be thin just as demand continues to recover, which is typically when vacancy compresses and rents firm.
TRERC expects vacancy to narrow 40 to 60 basis points by mid-2026 as supply is absorbed.¹² When construction slows while population grows, vacancies tighten and rent growth usually follows within 12 to 18 months. CoStar’s Capital Markets report also notes rising investor interest in well-located suburban communities, suggesting pricing stability as transaction volume gradually improves into 2026.¹⁴
For investors, this construction pullback is often the turning point of the cycle when well-located assets see faster rent recovery.
What to Watch: Risks and Realities
While San Antonio’s fundamentals are strong, the market is not without risks. Investors should keep several realities in mind:
- Affordability and wage growth will be crucial for sustained rent recovery. Rents reset because incomes lagged inflation, and any future growth must stay aligned with local pay. RealPage notes San Antonio’s median home price of about $317,000 could pull some higher-income renters into ownership if mortgage rates drop.¹
- CoStar classifies San Antonio as a tenant’s market for now but projects that steady job growth and limited new supply should support rent gains starting mid-2026.⁹
- Capital markets remain tight, which means disciplined underwriting is vital. Many buyers still face interest rates above cap rates, pressuring leverage.
Cycle Positioning: Why Steadfast Is Leaning In
Every real estate cycle moves through three acts: a correction phase, a supply-retreat phase, and a recovery phase when demand exceeds new deliveries. We believe San Antonio is transitioning from supply retreat to early recovery.
RealPage describes the national market as recalibrating to sustainable rent levels, while TRERC expects gradual tightening through 2026.⁷,¹² Together, these signals point to steadier occupancy and measured rent growth over the next 18 months.
National multifamily fundamentals are firming as new supply cools, and San Antonio is already rebalancing because its pipeline collapsed while demand remains positive. With rents near sustainable levels and fewer projects breaking ground, the next phase favors stability first and growth second, exactly the environment Steadfast intends to target.⁷
Disclaimer: The information provided herein is for informational and educational purposes only and should not be construed as investment advice, an offer, or a solicitation to buy or sell any security. Private real estate investments involve significant risks, including loss of principal, and are intended for accredited investors who understand and can bear those risks. Past performance is not indicative of future results. Forward-looking statements are based on current assumptions and expectations; actual results may differ materially. Investors should conduct their own due diligence and consult with their financial, legal, and tax advisors before making any investment decision.
Footnotes
- RealPage, San Antonio Demand Hits a Record High, 2025.
- RealPage, Market Analytics Dashboard Q2 2025, Occupancy approximately 93–94 percent.
- The Real Deal, Permit Trends Show Collapse of San Antonio Apartment Pipeline, Oct 3, 2025.
- CBRE and Fannie Mae, Multifamily Outlooks 2025–2026, Texas rent-growth forecast 3–5 percent.
- RealPage, National Multifamily Trends Fall 2025, Starts down 62 percent, concessions easing.
- CoStar / Apartments.com, U.S. Apartment Rents Fall in Steepest September Decline in 15 Years, Oct 9, 2025.
- RealPage, 3rd Quarter 2025 Multifamily Forecast Update, Oct 2025.
- Houston Innovation Map, Cost of Living Comparison 2025.
- CoStar, Multifamily Rents Forfeit Spring Gains in San Antonio as Cooler Fall Looms, Oct 2025.
- RealPage, Major Markets Concessions August 2025, 29.9 percent of San Antonio apartments offering incentives.
- RealPage, San Antonio Demand Hits a Record High, 2025, Class C rent trend.
- Texas A&M TRERC, Real Estate Forecast (12 Months Ending Summer 2026).
- Census Bureau and RealPage, South region multifamily permit trends, 2025.
- CoStar, San Antonio – TX USA Multifamily Market Report, October 13 2025.
- CoStar, San Antonio – TX USA Capital Market Report, October 13 2025.
