Top U.S. Multifamily Rent Growth Markets — Q2 2023

Multifamily rent growth in the U.S. was spread throughout a diverse selection of markets during the second quarter of 2023, a change from the last several quarters when Sun Belt markets dominated the list. Overall, average effective rents were up 3.8% year-over-year, down from the skyrocketing pace of 10.0% in 2022, and 12.8% in 2021.

Climbing fast up the list this quarter was Nashville, where effective rents rose 9.1% year-over-year. The market posted a 10.9% rent growth rate in 2022 and a historical high of 16.1% in 2021. Like many markets on the list, rental demand has been driven by positive net migration, a favorable business environment, and relatively affordable housing. Nashville has also had one of the more active multifamily development pipelines in the country over the last few years. Because of that, vacancy rates remain moderately high despite the market’s strengths.

The St. Louis market came in at the number two spot on the list, with a 7.6% year-over-year growth rate. Additionally, the market’s vacancy rate finished at 4.2% at the end of the quarter, the lowest level in more than 20 years. In addition to a favorable cost of living and low business costs, multifamily demand in St. Louis has also recently benefited from a skilled workforce and the growth of new technology industries.

Once again, large coastal markets comprised half the list during the second quarter, which has been an evolving trend this year. Despite accelerated migration to the suburbs and the adoption of remote work during the pandemic, these cities remain hubs of innovation, magnets to venture capital, and attractive to renters. The strongest markets included Central New Jersey (up 7.4% year-over-year) and Boston (7.4%). Although not to be forgotten, the Sunbelt was represented by consistent performers Dallas (5.7%) and Houston (5.5%).

Here’s a full look at the top U.S. multifamily rent growth markets for Q2 2023, with data provided by Moody’s Analytics CRE.

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