Q2 2023 US Multifamily Figures

Executive Summary

• The U.S. multifamily market recorded 70,200 units of positive net absorption in Q2—the first significant amount of quarterly demand since Q1 2022.
• New construction deliveries of 91,400 units in Q2 brought the trailing four-quarter total to 351,500—the highest on record. Construction starts have been declining in recent quarters, which will lower deliveries in 2024 and beyond.
• The overall multifamily vacancy rate increased by 10 basis points (bps) quarter-over-quarter to 5.0%, equal to its long-term average. This was less than the 30-bp increase in Q1 2023 and the 70-bp jump in Q4 2022, indicating that supply and demand dynamics are stabilizing.
• Average monthly net effective rent increased by 2.6% year-over-year, down significantly from the record 15.2% increase in Q1 2022 but in line with the pre-COVID five-year average of 2.7%. On a quarter-over-quarter basis, average rent increased by 1.1% in Q2, reflecting typical seasonality.
• Multifamily investment volume totaling $27.5 billion in Q2 was well below the $ 95.6 billion of a year ago but slightly more than in Q1 2023. Except for Q2 2020 due to the pandemic, this was the lowest Q2 volume since 2014 and 27% less than the 2013-to-2019 quarterly average. Multifamily still maintained the largest share of commercial real estate investment volume in Q2 with 35%.