Why Secondary & Tertiary Markets Can Outperform in 2025

The headline story of 2025: supply concentration has muted performance in several high‑growth Sun Belt metros while supply‑constrained markets (often secondary/tertiary) outperform. Fannie Mae highlights metros like Chicago, Cleveland, Cincinnati, Louisville as relative winners; Freddie Mac expects positive but below‑average national rent growth with market-by-market dispersion.

Operationally, these markets offer stickier tenancy, lower turnover costs, and less concession warfare—advantages that compound when combined with measured capex and leaner payrolls. For capital allocators, the logic is simple: pick growth corridors with manageable pipelines and underwrite to realistic rent and vacancy.