Multifamily Fundamentals Begin to Stabilize

Executive Summary

• Year-over-year rent growth held steady with Q4 at 0.4%. Average annual rent growth likely will remain relatively flat over the short term before beginning to accelerate in the second half of 2024.
• The overall multifamily vacancy rate increased by only 10 basis points (bps) quarter-over-quarter to 5.5%. Although job growth and household formation continue to drive positive absorption, the vacancy rate will likely drift slightly higher through midyear.
• Construction completions of 73,700 units in Q1 boosted the rolling-four-quarter total by 26% to a record 429,500 units. Fewer construction starts in recent quarters will lower deliveries in 2025 and beyond.
• Net absorption totaled 52,200 units in Q1—the third highest Q1 total in over 20 years. Demand continues to close the gap with new supply, as some markets had near parity between the two in Q1.
• Multifamily investment volume fell by 28% quarter-over-quarter to $19.8 billion, the lowest quarterly total since Q2 2020.