Multifamily Market Gaining Momentum in 2024

[Sanjeev Advani]

As 2024 progresses, the multifamily market is showing signs of recovery. While not as dynamic as the post-pandemic boom, key indicators suggest positive momentum is building.

Vacancy Rates and Demand: U.S. multifamily vacancy rates declined for the first time since 2021, with the Sunbelt region leading demand. Nearly 140,000 units were absorbed in Q2 2024, marking one of the strongest performances in decades.

Construction and Rent Growth: Despite strong demand, new construction has dropped by 60% compared to last year. This supply constraint, coupled with steady demand, is expected to drive rent growth in the coming months.

Capital Markets and Valuations: U.S. multifamily transaction volumes reached $38 billion in Q2, signaling a thaw in capital markets. Multifamily valuations have stabilized, and investor interest is picking up, particularly in resilient regions like the Midwest.

Economic Outlook: The U.S. economy is expected to avoid a severe recession, allowing the Fed to ease monetary policy later this year, which should further bolster the multifamily sector.

Investors should keep an eye on these trends as the market continues to recover. The upcoming NMHC conference in 2025 will provide more insights into these evolving dynamics.