Top U.S. Multifamily Rent Growth Markets — Q4 2023

While the overall U.S. multifamily slowed in 2023 following a historic run in 2021 and 2022, there were standout performances at the market level. In the previous two years, Sun Belt markets dominated the top rent growth lists, as pandemic-related re-shuffling settled. In 2023, the list of top markets became much more diverse.

Nationally, rent growth was down 1.7% during the year. But with growth rates of 10.1% in 2022 and 12.9% in 2021, the multifamily market entered 2023 in a strong position. Demand remains robust, with high housing prices causing younger generations of higher-income households to choose lifestyle renting.

The market posting the highest year-over-year rent growth was Milwaukee, where the average effective rent finished 2023 at $1,306/year, up 2.0% compared to the fourth quarter of 2022. The recovery of this local economy has been driven by a well-educated workforce, a strong manufacturing sector, and above-average income levels. Rental demand is expected to stay strong in Milwaukee over the near term, with absorption forecasted to outpace new construction over the next two years.

Sacramento finished in second position, with rents rising 1.9%. California’s capital city has benefited from a lower cost of living than other markets in the Bay Area, as well as a stable job market based on the government and healthcare sectors. The rental market has been driven by a tight housing market that has forced would-be homebuyers to consider renting instead.

Mountain West markets also finished high on the list, with Denver (up 1.3%) and Salt Lake City (up 1.2%) finishing in the third and fourth positions.

Here’s a full look at the top U.S. multifamily rent growth markets for Q4 2023, with data provided Moody’s Analytics CRE.

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