Multifamily National Report

Fundamentals continue to soften as the economy cools. After hitting an all-time low of just 2.5 percent in early 2022, apartment vacancy in the U.S. has now risen in four straight quarters. Availability surpassed the 5 percent mark in March, the first time it has eclipsed that threshold since 2018. From a historical context, however, vacancy is on par with the trailing 30-year average. Higher availability nevertheless has flattened rents, following record-setting growth during the pandemic. As of the first quarter of 2023, the average effective monthly rate nationally was down about 0.6 percent from 2022’s peak, but still up 6.4 percent year-over-year. Immense new supply over the remainder of this year will keep vacancy on an upward path near-term, while also lifting the average rent as new high-quality units come online. The potential for supply overhangs in select markets with large pipelines is likely, yet population and housing dynamics indicate that these deliveries are necessary longer-term.