Tucson Multifamily Market Report
Elevated Homeownership Costs and Significant Hiring
Plans Buoy Apartment Demand Prospects
Tight single-family market aiding Class A rental metrics. Over the 18 months trailing June, the difference between the average monthly mortgage payment on a median priced home and the mean monthly rent for a top-tier apartment nearly doubled, rising to $1,060. Responding to elevated homeownership costs, a growing portion of locals are remaining in the renter pool for longer. This is most apparent in the Class A sector, with top-tier apartments recording the lowest rise in vacancy among class cuts during the past year. As a result, Tucson’s top-tier metric was at least 50 basis points below other segments in June, after having the highest average rate among classes during the past three years. With the metro’s single-family permitting activity also slowing to a half-decade low in early 2023, a lack of new housing inventory should continue to direct residents to Class A options long-term, benefiting performance in the segment.