Multifamily Vacancy Rate Falls as Absorption Surges

Executive Summary

• Renter demand outpaced new deliveries in Q4, lowering the overall multifamily vacancy rate to 4.9%—slightly below its long-run average of 5.0%.
• Average year-over-year effective rent growth increased slightly to 0.5% in Q4 but is expected to accelerate in coming quarters as occupancy rises.
• Net absorption of 183,600 units was the highest Q4 total since CBRE began tracking the market in 1985 and 12 times more than the pre-pandemic Q4 average. Demand surpassed new completions for the third consecutive quarter.
• 2024 was the first year on record that positive net absorption was recorded in all markets during Q4. Typically, most markets experience very low or negative net absorption in Q4.
• Construction completions of 114,000 units boosted the annual total to a record 450,400, an 8% increase over 2023.
• Annual multifamily investment volume increased by 19% to $142.6 billion. Q4 volume rose by 59% year-over-year to $43.4 billion.