Rent Growth Rates Decline Despite Steady Demand in Multi-Family Sector

For the first time in a year, the rent growth rate for multi-family and apartment properties are declining, and may soon be negative compared to the year prior. This however, is not due to a lack of demand as the national occupancy percentage for apartment units remains above 90%.

Multi-family construction has been at a nearly 50 year high with over a million new units being completed post pandemic in the U.S. The increase in supply has given more options to potential renters and less pricing power to landlords.

Despite the decline in rent growth rates, multi-family properties are still one of the most valuable asset classes in commercial real estate and demand shows no signs of slowing amid the current housing crisis. New supply is expected to remain inflated through 2024 and decrease again by mid-2025. Multi-family and apartment units are still appealing to investors, and it is critical to have the most up to date valuations on the potential properties. Working with a trusted Commercial Real Estate Appraisal firm like LPA can assist investors in making the most? informed decisions.

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