U.S. Multifamily Market Snapshot — May 2024
Key fundamentals of the U.S. multifamily sector remained strong to start 2024. Despite fears of oversupply, rent growth was stable and vacancy rates stayed near historical lows. The construction pipeline showed signs of slowing recently, which will continue to support robust demand as many would-be homebuyers choose renting over homeownership.
According to Moody’s Analytics CRE, multifamily rent growth in the U.S. was down 0.9% year-over-year. However, the market started 2024 on solid footing after three strong years of performance. Additionally, a closer look at individual markets shows a wide range of diversity among the top performers.
Analysis of new permit filing shows that the elevated pace of construction will slow in the coming quarters, although the pipeline remains full. In 2023, supply outpaced demand for the first time since 2020, although multifamily fundamentals remain healthy as continued high home prices lead younger and higher-income households to choose renting over homeownership.
The latest Quarterly Survey of Apartment Construction & Development Activity from the National Multifamily Housing Council (NMHC) signaled that construction delays were reported by 81% of respondents, down from 84% in December.
After a two-year boom in the multifamily investment market, sales volume fell to $119.0 billion during the 12 months ending in March 2024, according to MSCI Real Capital Analytics. Although this was a significant slowdown from record-breaking investment activity in the previous two years, the total was only 7.6% below the 15-year annual average.
The U.S. economy added 175,000 jobs during April, the 40th straight month of gains. The unemployment rate was essentially unchanged at 3.9%, remaining near 50-year lows, and has remained below 4% for more than two years.
Here’s a look at the U.S. multifamily finance and investment key benchmarks.
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