While macroeconomic headwinds may not recede soon, tenant dependability, the core strength of small multifamily, has proven to be a powerful antidote to financial market storms.

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.

The U.S. multifamily market continued to slow during the second quarter of 2023. Rent growth retreated from the skyrocketing pace of the last two years, although still remained positive alongside continued high rental demand.

The small multifamily sub-sector ended 2022 on a high note with originations falling just behind 2021’s peak. As economic storm clouds continue circling, small multifamily appears fortified from any reverberations that may result.

The U.S. multifamily market continued to show signs of slowing during the first quarter of 2023. Rent growth was down from the skyrocketing pace seen in 2021 and 2022, although demand remained strong and vacancy held near historic lows.

Over the last few years, the list of top rent growth markets was dominated by the more affordable Sun Belt markets. However, over the last several months, a more diverse selection of markets has comprised the list.