Cushman & Wakefield published its latest Multifamily Marketbeat, a quarterly snapshot into the performance of the multifamily sector across supply and demand, rent growth, and construction levels. In the Q3 2024 report, Cushman & Wakefield highlights the returning demand for multifamily units, a slight uptick in rent growth, and the current level of construction, which is down 36% from peak levels in Q1 2023.
The brightest news in Q3 2024 highlights the increase in rents. Nationally, rent growth improved to 2% year-over-year in the third quarter, the highest since the first quarter of 2023 when rent growth hit 4%. “There is still a way to go for the market to resume a ‘normal’ rent growth trajectory—the year-over-year rate is about half the 2010-2019 average of just over 4%—but it’s a welcome sign given the weaker rent growth observed over the past 12-18 months,” notes Sam Tenenbaum, Head of Multifamily Insights at Cushman & Wakefield.
Additionally, demand remains strong with net absorption reaching over 360,000 units year-to-date, a 44% increase from 2023’s full-year total.
“This marks the first time since 2020—and only the second time since 2012—that demand improved from the second to the third quarter,” notes Tenenbaum. “As a result, vacancy has remained largely stable at 8.7%, up just 20 basis points (bps) since the end of last year. Stabilized vacancy, which excludes newer assets that haven’t had time to lease up, declined by about 10 bps during that same period.”
If demand growth remains robust and the construction financing market remains challenged, Cushman & Wakefield reports that the market may have reached peak vacancy for the cycle.
To read the full report, visit Cushman & Wakefield.