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Market Report

Phoenix Multifamily Market Report

2Q 2024

Supply-Induced Rent Recalibration Unlids
Pent-Up Housing Demand in Phoenix

Metro finding new supply-demand equilibrium. Apartment concessions are facilitating greater leasing activity, after three straight years of record inventory expansion. An all-time quarterly high of 5,600 units were occupied on net in Phoenix from January to March. Many local residents — much of whom sought roommates or lived with parents following near-30 percent rent growth in 2021 — are seeking new dwellings amid easing rents. The average effective apartment rent in March fell 1.6 percent below the 2021 level, with nearly four times the number of apartments now offering concessions. While potentially challenging operators in the short-term, rent concessions have been vital to safeguarding occupancy from elevated supply. Class A vacancy held steady at 6.6 percent over the first quarter, despite the highest number of completions since 2000. 
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