Equity Residential (EQR Quick QuoteEQR - Free Report) is slated to report third-quarter 2025 results after the closing bell on Oct. 28. The company’s quarterly results are likely to reflect growth in both revenues and funds from operations (FFO) per share.

In the last reported quarter, this Chicago, IL-based residential real estate investment trust (REIT) came up with an in-line performance in terms of normalized FFO per share. Results reflected a rise in same-store revenues and physical occupancy on a year-over-year basis. 

Over the trailing four quarters, Equity Residential surpassed the Zacks Consensus Estimate on one occasion and met in the remaining three, the average positive surprise being 0.54%. The graph below depicts this surprise history:

Equity Residential Price and EPS Surprise

Equity Residential price-eps-surprise | Equity Residential Quote

As we approach the release of Equity Residential's third-quarter 2025 earnings report, it is important to examine how this residential REIT is likely to have performed amid the current market conditions.

US Apartment Market in Q3

After two years of robust growth, the U.S. apartment market has finally hit a pause, with rent growth slipping into negative territory in the third quarter of 2025. According to RealPage data, effective asking rents fell 0.3% between July and September, the first rent cut between July and September since 2009. In the year-ending third quarter, rents slipped 0.1%. The slowdown reflects a cooling economy.

About 637,000 market-rate apartments were absorbed in the year-ending third quarter of 2025. While still healthy by long-term standards, it is a clear step down from the record nearly 784,900 units absorbed in the year-ending second quarter of 2025. “Sluggish new lease activity” is the culprit, said RealPage Chief Economist Carl Whitaker, pointing to weaker job growth and more cautious consumer behavior as key factors behind the shift amid an uncertain economic backdrop.

While demand cooled, construction of roughly 474,800 units was completed nationwide over the past year, including 105,500 in the third quarter alone. That’s below last year’s peak but still well above normal supply levels. With so many new units hitting the market, landlords have had to compete harder to fill vacancies. Occupancy slipped to 95.4% in the quarter, down 30 basis points and ending five consecutive quarters of gains.

To attract renters, concessions became more common, with 22% of properties offering discounts averaging 6.2%. Operators are increasingly prioritizing occupancy over pricing power, suggesting rent softness may persist until concessions taper off. Interestingly, resident retention rose year over year, as renters chose to stay put amid economic uncertainty.

The rent cuts haven’t hit every region equally. Markets that built aggressively during the boom, especially across the South and West, are seeing the steepest declines. Rents dropped nearly 8% in Denver and Austin and around 5% in Phoenix and San Antonio, TX. Meanwhile, tourism-driven cities such as Las Vegas, Orlando, Nashville and San Diego are softening, too, as travelers spend less and local economies cool. In contrast, markets with lighter construction pipelines, such as the Midwest and Northeast, have held up better. Tech-heavy coastal hubs like San Francisco, New York and San Jose even saw modest rent growth, likely helped by return-to-office policies and limited new deliveries.

Projections for EQR

In this environment, Equity Residential’s quarterly results are likely to receive a boost from its strategic portfolio diversification across urban and suburban markets. Its focus on higher-income renters — a segment marked by lower unemployment and greater economic stability — has served as a significant strength. 

With a strong balance sheet, Equity Residential leverages technology, scale and operational efficiency to fuel growth. Its strong financial position is expected to support ongoing development initiatives. However, an elevated supply of rental properties may have presented a headwind.

In September, in an operating update, Equity Residential reaffirmed that its operations remain within guidance. The REIT reported that its same-store revenue growth is on track, and it continues to expect to generate same-store revenue growth of 2.6% to 3.2% and physical occupancy of 96.4% for full-year 2025. Additionally, EQR reaffirmed its blended rate growth forecast of 2.2% to 2.8% for the third quarter. The company noted about wrapping up its peak leasing season with sustained high occupancy levels and solid resident retention.

Currently, the Zacks Consensus Estimate for the company’s quarterly revenues stands at $781.41 million, which indicates a 4.4% increase year over year. 

We expect third-quarter same-store revenues to increase 1.9% year over year, while same-store net operating income (NOI) is estimated to grow 1.7%. Physical occupancy is expected at 96.4%. 

For the third quarter of 2025, the company projects normalized FFO per share in the band of 99 cents to $1.03. Before the third-quarter earnings release, the company’s activities were not adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly normalized FFO per share has been unrevised in the past month at $1.02. However, it suggests 4.1% year-over-year growth.

Here Is What Our Quantitative Model Predicts for EQR:

Our proven model does not conclusively predict a surprise in terms of FFO per share for Equity Residential this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

Equity Residential currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the residential REIT sector — American Homes 4 Rent (AMH Quick QuoteAMH - Free Report) and Essex Property Trust, Inc. (ESS Quick QuoteESS - Free Report) — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

American Homes 4 Rent, scheduled to report quarterly numbers on Oct. 29, has an Earnings ESP of +1.44% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Essex Property Trust is slated to report quarterly numbers on Oct. 29. ESS has an Earnings ESP of +0.45% and carries a Zacks Rank of 3 at present.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.