Apartments.com Publishes Multifamily Rent Report for First Quarter of 2024

Today, Apartments.com – a CoStar Group online marketplace – released an in-depth report of multifamily rent trends for the first quarter of 2024.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240404033182/en/

U.S. Apartment Rent Growth (Graphic: Business Wire)

The U.S. multifamily market staged a strong rebound in demand during the first quarter of 2024, as 104,400 units were absorbed, the highest number since the third quarter of 2021. While the increase in demand was impressive, it was still overwhelmed by the 140,000 new units delivered in the last quarter. This supply-demand imbalance increased the vacancy rate from an upwardly revised 7.7% at the end of December 2023 to 7.8% in March 2024, marking the tenth consecutive quarter in which supply outpaced demand. However, the ten-basis-point rise in vacancy is the smallest seen over the past ten quarters.

The national average annual asking rent rose by 0.7% in March compared to 0.8% in the two prior months. Since mid-2023, annual rent growth has been hovering around 1% after rapid deceleration in 2021 and 2022. Month-over-month rent growth was 0.3% in all three months of the quarter.

Midwest and Northeast markets have avoided oversupply conditions and maintained solid rent growth over the year at 2.2% and 1.3%, respectively. Markets in the West closely matched the nation as weak demand mixed with limited completions have kept rent growth restrained but positive. Still, continued oversupply conditions in the South have kept rent growth in negative territory.

At 3.4%, Louisville ended the first quarter with the strongest annual asking rent growth of the top 50 markets nationwide, with Northern New Jersey and Cleveland close behind. The top 10 best-performing markets for yearly rent growth are all in the Midwest or the Northeast.

At the opposite end of the scale, rents fell by 5.7% over the past 12 months in Austin. Jacksonville, Raleigh, Atlanta, and San Antonio were not far behind, with annual rent losses ranging from 3.6% to 3.0%. With supply-demand imbalances still challenging, nine of the bottom ten performing markets are in the South.

Absorption was led by 4&5-Star units, with just over 88,000 units in the quarter. But with most new supply aimed at the luxury market, annual asking rent growth remained negative in that segment and finished March at -0.3%. This decline contrasts with mid-priced assets that benefited from rising demand for 3-Star properties, where net absorption increased from 10,000 units in the fourth quarter of 2023 to 27,000 units in the first quarter of 2024, helping keep rent growth positive at 1.3%. Improving consumer confidence, lower inflation, and sustained economic expansion all helped boost 3-Star demand.