National Multifamily Report – September 2024 Overview
Executive Summary
In September 2024, national multifamily rents declined slightly by $3 to $1,750, with year-over-year growth at 0.9% and stabilized occupancy steady at 94.8%. Single-family rentals (SFR) also saw a minor rent drop to $2,167, while occupancy held at 95.3%.?
Economic improvements are fueling optimism in the multifamily sector, with rent performance tied to supply dynamics. Markets with limited new supply, such as New York City (5.4% year-over-year), Kansas City (4.2%), and Boston (3.4%), posted strong rent gains, while metros with higher supply like Austin (-4.9%) and Phoenix (-2.4%) experienced declines.
The Lifestyle segment drove the national rent drop, falling $6, while the Renter-by-Necessity segment remained stable, supported by high-demand cities. Occupancy rates remain stable across most markets, with robust demand continuing post-pandemic. Major metros like Dallas and Houston led national absorption trends.
Introduction
In September, the national multifamily market saw advertised asking rents dip by $3 to an average of $1,750, reflecting steady demand, according to Yardi Matrix's latest survey of 140 markets. Year-over-year, rent growth remained modest at 0.9%, while stabilized assets maintained a healthy 94.8% occupancy rate. Similarly, single-family rental (SFR) rates also experienced a slight decline, falling by $3 to $2,167 in September, marking a 0.6% year-over-year increase. SFR occupancy remained robust, standing at 95.3% as of August, despite a minor year-over-year decrease of 30 basis points.
Economic Conditions Boost Multifamily Optimism
Improving economic conditions have rekindled confidence in the multifamily sector, although rent performance continues to be closely tied to supply dynamics. Among the 30 major metros surveyed by Yardi Matrix, rent growth was notably stronger in markets with limited new supply. In fact, eight of the 10 metros with the least supply growth experienced positive rent gains, while eight of the 10 metros with the highest supply growth saw rent declines.
On a regional level, Eastern gateway cities and Midwestern secondary markets led in rent growth, with New York City (5.4% year-over-year), Kansas City (4.2%), and Boston (3.4%) standing out. Conversely, some of the worst-performing metros included Austin (-4.9%), Raleigh (-3.1%), Phoenix (-2.4%), Tampa (-2.3%), and Charlotte (-2.1%).
Segment Performance: Lifestyle vs. Renter-by-Necessity
The $3 overall decline in rents can be attributed to a 0.3% month-over-month decrease in the Lifestyle segment, where rents dropped by $6 to $2,065. Meanwhile, the Renter-by-Necessity segment remained stable, supported by sustained demand in high-cost, low-supply cities like New York (0.9% rent growth), Philadelphia (0.6%), and Indianapolis (0.5%).
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Absorption and Occupancy Trends Point to Strong Demand
Occupancy levels held steady at 94.8% for the fourth consecutive month in September, reflecting consistent demand. Most markets experienced minimal changes in occupancy, ranging from -0.2% to 0.2%. Notable exceptions included Las Vegas, where occupancy surged by 1.2% to 93.8%, followed by Detroit and Portland, both seeing increases of 0.5%.
Since the onset of the pandemic, demand for multifamily units has been robust, driven by economic growth, employment, immigration, and demographic trends. Between March 2020 and August 2024, the national multifamily market absorbed 1.7 million units, or roughly 10.8% of the current stock. This includes more than 300,000 units absorbed in the first three quarters of 2024 alone. Major contributors to this absorption include Dallas (108,000 units), Houston (71,000 units), and Washington, D.C. (60,000 units).
SFR Market: Modest Decline in Rents, Strong Occupancy
In the single-family rental market, advertised asking rents fell slightly by $3 to $2,167 in September, representing a 0.6% increase year-over-year. Occupancy rates in the SFR sector remained stable at 95.3%, maintaining healthy levels despite minor fluctuations.
Kansas City (4.7%), Indianapolis (4.3%), Columbus (3.8%), Chicago (3.4%), and Detroit (2.6%) led the way in SFR rent growth over the past year. On the other hand, metros with lower occupancy rates saw declining rents, such as Phoenix (-3.8%, 92.6% occupancy), Jacksonville (-2.9%, 90.9%), and Austin (-2.7%, 90.8%).
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