The Memphis rental market is inevitably changing in 2025. Home price increases, shifts in population, and monetary activity influence how people rent, own, and manage properties within the city.
It is essential to know these changes if you plan to rent, buy, or own and manage properties in Memphis.
Rent Prices Are Rising
All major property types have seen a rise in the average rent in Memphis.
New changes include:
- A studio apartment rents for $1,112 monthly, a 12% decrease from last year.
- One-bedroom apartments are available for $1,160 per month, which is 9% annual growth.
- Two-bedroom apartments are $1,307 monthly, an 18% increase.
The increases are mainly caused by high demand and a lack of housing supply. Downtown Memphis and Germantown have especially experienced the highest rent growth because of the amenities and jobs.
Vacancy Rates Remain Low
The rates in Memphis still range between 5% and 1% lower than last year. This is because the rental market is still thin for the landlords and property managers to get tenants but thick for the people in need of affordable housing. Some key reasons for the low vacancy rates are limited new apartment construction in the mid-range and affordable apartments category and increased demand from young professionals and families. More people live in properties because of the high prices of homes and cannot afford to buy them.
How Property Managers Fit In
With rents rising and inventory remaining scarce, property managers play a significant role in keeping the rental market functioning. They assist in helping the landlords set the correct rent, get the right tenants, and deal with the maintenance and repair of the property. More tenants are also looking for well-managed properties and owners who are easily reachable, meaning that professional property management services are more valuable than they have ever been.
Housing Affordability Challenges
Homeownership remains unaffordable for many Memphis residents due to rising home prices. The median home price is $144,131; 3.19% higher than last year. Higher mortgage rates also make buyers more cautious, increasing demand for rental homes.
Neighborhood Trends: Where Renters Are Moving
Some neighborhoods are still experiencing higher rental demand than others. The rents for one-bedroom apartments in Downtown Memphis are more than $1,500 per month due to the demand for city living. Germantown: This two-bedroom apartment rents at $1,800 per month, thanks to top-rated schools and a family-friendly environment. More affordable, with one bedroom averaging $1,300 per month, is Midtown, which is ideal for young professionals and artists, respectively.
New Construction Is Behind the Market
Memphis experienced roughly 3,000 housing unit completions in 2024, which is insufficient to meet the need. Most new developments are focused on the high-end market, leaving a shortfall in affordable rentals. As long as no more mid-range homes are being built, renters will have to pay top dollar and have limited options.
The Role of Property Managers in 2025
Property managers are gradually becoming essential in Memphis’ rental market. Their responsibilities include:
- Determining the correct rental rates that warrant occupancy of the properties while guaranteeing the owners get the best return on their investment.
- Effectively screen tenants to reduce turnover and maintain a steady rental income stream.
- Manage property maintenance to ensure the units remain in good condition and not require costly repair.
- As the market changes, assist investors in identifying profitable rental opportunities.
What Renters Should Expect
If you rent in Memphis in 2025, you should be prepared for higher rent prices, especially in the best areas. There are fewer available units, meaning grabbing a good listing as soon as possible is essential. More significant security deposit amounts are likely due to the increased competition. Well-mannered properties with good amenities will be in high demand.
Final Thoughts
The rental market in Memphis is changing due to the changing economy, rising home prices, and a lack of new housing. Renters are likely to pay more and compete for properties. In contrast, landlords and property managers must find ways to profit from these changes. Property managers must stay ahead of these changes to maintain high occupancy rates and tenant happiness in 2025.
At Revid Realty, we keep a close eye on the rental market in Memphis and gain valuable knowledge that can improve our property owners’ clients’ business. If you want to pick our brain, don’t hesitate to call us today.