Regional FMR Trends to Watch in 2025

As we move through 2025, several interesting trends are emerging in Fair Market Rent (FMR) data across different regions of the United States. For real estate investors, understanding these trends is crucial for identifying opportunities and optimizing portfolio performance.

Sunbelt Markets Continue to Shine

The migration to Sunbelt states that accelerated during the pandemic shows no signs of slowing down in 2025. FMR data reflects this ongoing trend:

• Austin, Texas has seen FMR increases of 8.3% year-over-year
• Phoenix, Arizona continues strong with 7.1% FMR growth
• Nashville, Tennessee shows robust 6.9% increases across all unit types

These markets benefit from a combination of strong job growth, more affordable cost of living compared to coastal metros, and lifestyle amenities that continue to attract relocators.

Midwest Renaissance

Perhaps the most surprising trend in 2025 FMR data is the strong performance of select Midwest markets. After years of modest growth, several Midwest cities are showing remarkable momentum:

• Columbus, Ohio leads with an impressive 6.7% FMR increase
• Indianapolis, Indiana shows consistent 5.8% growth
• Grand Rapids, Michigan emerges as a strong performer with 5.5% FMR growth

These markets benefit from infrastructure investments, growing tech sectors, and relative affordability that attracts both residents and businesses looking to escape higher-cost areas.

Coastal Markets: A Mixed Picture

Traditional coastal powerhouse markets show varied performance in 2025:

• Boston and Seattle show moderate FMR growth (3.2% and 3.8% respectively)
• San Francisco finally stabilized after post-pandemic volatility (2.1% growth)
• Miami stands out with strong 7.3% FMR increases, driven by continued migration

The days of reliable double-digit growth in coastal markets appear to be over, but select areas continue to offer stability and modest appreciation.

Secondary Markets Outperform

One clear pattern in 2025 FMR data is the outperformance of secondary markets compared to their larger neighbors:

• Tacoma outpaces Seattle with 5.7% vs 3.8% FMR growth
• Sacramento shows stronger performance than San Francisco (5.2% vs 2.1%)
• Providence outperforms Boston with 4.9% vs 3.2% growth

This trend reflects continued "hub and spoke" migration patterns, where residents seek proximity to major employment centers while enjoying more affordable housing in nearby communities.

Unit Size Trends

Interestingly, 2025 FMR data also reveals divergent trends based on unit size:

• Two-bedroom units show the strongest growth in most markets (average 5.3% nationally)
• Studio apartments lag in many regions (average 3.1% nationally)
• Three-bedroom units outperform in family-oriented suburban markets

Leveraging These Trends

For investors, these trends offer clear guidance for portfolio optimization:

1. Consider increasing allocation to strong-performing Sunbelt and Midwest markets
2. Focus on secondary markets near major employment hubs
3. Adjust unit mix to favor two and three-bedroom properties in appropriate markets
4. Use Portfolio FMR tools to identify specific zip codes with the strongest growth potential

By closely monitoring FMR trends and adjusting your investment strategy accordingly, you can position your portfolio for stronger performance through 2025 and beyond.