What's in Store for Mid-America Apartment Stock in Q3 Earnings?

Mid-America Apartment Communities MAA — commonly known as MAA — is a real estate investment trust (REIT) that focuses on owning, operating and acquiring apartment communities throughout the Southeast, Southwest and Mid-Atlantic regions of the United States. The company is slated to report third-quarter 2025 results on Oct. 29, after market close.

In the last reported quarter, this Germantown, TN-based residential REIT reported core FFO per share of $2.15, which surpassed the Zacks Consensus Estimate of $2.14. Results reflected a fall in same-store revenues, with average effective rent per unit declining year over year. However, the REIT witnessed low levels of resident turnover.

Over the trailing four quarters, MAA surpassed the Zacks Consensus Estimate on three occasions and missed in the other period, the average beat being 0.81%. This is depicted in the chart below:

Mid-America Apartment Communities, Inc. Price and EPS Surprise

Mid-America Apartment Communities, Inc. price-eps-surprise | Mid-America Apartment Communities, Inc. Quote

Let’s see how things have shaped up before this announcement.

U.S. 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, rent 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 against 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. Tourism-driven cities such as Las Vegas, Orlando, Nashville and San Diego continued to lose momentum in the third quarter, as travelers tightened discretionary spending. However, markets with lighter supply additions, such as the Midwest and Northeast, have logged modest price increases. Tech-heavy coastal markets like San Francisco, New York and San Jose even saw rent growth, likely helped by return-to-office policies and waning supply volumes.

Factors to Consider Ahead of MAA’s Upcoming Results

MAA’s broad exposure to the Sunbelt region likely benefited from strong rental demand across its markets. The region's pro-business environment, attractive tax structure and relatively lower urban density support job creation and population inflows, contributing to sustained leasing momentum. The company is also expected to have benefited from its portfolio revamp efforts.

However, elevated new supply in several Sunbelt markets may have limited MAA’s capacity to push rents in the third quarter. Furthermore, high interest expenses continue to weigh on the company, which could hinder its acquisition and development plans.

Projections for MAA

The Zacks Consensus Estimate for quarterly revenues is pegged at $556.1 million. This suggests a 0.89% rise from the year-ago quarter’s reported figure.

For the third quarter, we project an average physical occupancy of 95.5%, up 10 basis points from the prior quarter. However, we expect same-store property net operating income to fall 1% year over year. Our estimate indicates a 14.7% year-over-year increase in the company’s interest expenses.

MAA projected third-quarter 2025 core FFO per share in the band of $2.08-$2.24, with $2.16 at the midpoint. Before the third-quarter earnings release, the company’s activities were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly core FFO per share has been revised a cent north to $2.17 in the past two months. However, this suggests a year-over-year decline of 1.81%.

Here is What Our Quantitative Model Predicts for MAA

Our proven model does not conclusively predict a surprise in terms of FFO per share for MAA 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.

MAA currently carries has an Earnings ESP of 0.00% and carries a Zacks Rank of 3. 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, Essex Property Trust ESS and American Homes 4 Rent AMH, you may want to consider, as our model shows that these have the right combination of elements to report an FFO beat this quarter.

Essex Property, scheduled to report quarterly numbers on Oct. 29, has an Earnings ESP of +0.04% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Homes 4 Rent is slated to report quarterly numbers on Oct. 29. AMH has an Earnings ESP of +1.44% 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.

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This article originally published on Zacks Investment Research (zacks.com).

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