Intelligent Investment
A Tale of Two Types of Cities
EA Chart of the Month: Matt Mowell and Tyler Mangin, Ph.D.
October 1, 2026 2 Minute Read
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Figure 1 shows the relative rank of two different market archetypes: high-growth Sun Belt markets and mature Gateway cities. (Note: a lower rank equates to stronger rent growth.) Rent growth in these markets has outperformed and underperformed at different points in the cycle. In retrospect, 2025 was an inflection point for these market types.
Gateway markets are characterized by a deep pool of multifamily demand and limited inventory growth, which helps them to perform relatively well when more dynamic markets like those in the Sun Belt are hitting a soft patch.
Gateway markets currently have a stronger near-term outlook because they were not subject to a supply deluge that hit the Sun Belt in recent years. This has helped Gateway market fundamentals amid a labor market slowdown in recent quarters. But while big Gateway markets are riding high today, history shows us the wheel will turn again for Sun Belt cities, and that is reflected in our forecasts.
Figure 1: Average Rank for Selected Sun Belt and Gateway Markets for 5-Year CAGR Rent Growth
Note: A Lower Rank Equates to Stronger Rent Growth
Sun Belt: Atlanta, Austin, Charlotte, Dallas, Nashville, Phoenix.
Gateway: Boston, Chicago, New York, San Francisco, Washington, D.C.
