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Market Report

Detroit Multifamily Market Report

2Q 2024

Positive Momentum Returns;
Revitalization Projects to Lift Demand Long-Term

Detroit could be turning the corner. The market is poised to return to positive net absorption this year after a 24-month span of feeble demand. A two-year high of 1,100 units absorbed on net in the first quarter is helping offset relinquishments reported in 2022 and 2023. However, a near-record of 2,300 rentals are slated to come online this year, likely causing vacancies to inch up in the short-term. Despite robust supply pressure, Detroit is poised to remain one of the 15 least vacant major metros in the nation through 2024. Relatively strong local occupancy is underlined by positive factors assisting demand. Specifically, the gap between average mortgage rates and apartment rents has doubled from the end of 2021, reiterating the comparative value of renting. This affordability challenge helped push the Class A vacancy rate down 40 basis points to 5.5 percent in the first quarter of 2024, while the other two class cuts held steady. 
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