U.S. Apartment Surges Despite Historic Supply Challenges

CRE observers anticipate new challenges will arise for multifamily as foreclosure rates go up amid ongoing economic uncertainty.
June 7, 2024
  • Across regions, U.S. apartment occupancy rates remain stable or are slightly up, with some markets seeing YoY growth.
  • Monthly rents reveal seasonal increases, with May marking the highest rate of change since June 2023.
  • Understanding current multifamily resilience can support more strategic decision-making amid supply challenges.
Key Takeaways

The U.S. apartment market maintains strong occupancy, showcasing resilience despite high supply levels, according to RealPage. 

Steady, As She Goes

The U.S. apartment market stayed stable in May, with occupancy holding firm at 94.2% for the seventh consecutive month. 

In other words, despite high supply, occupancy remained consistent, reflecting strong demand for apartments nationwide, with renters absorbing new units at healthy rates. 

Specifically, occupancy rates have stayed within a very narrow band for 17 months now, stabilizing after a period of easing in 2023. 

Mixed Fortunes

Across all regions, occupancy either slightly rose or remained steady in May. Notably, major markets in the Midwest and Northeast saw a 10 bps rise in occupancy MoM. Certain markets, like Richmond, West Palm Beach, and San Francisco, recorded YoY increases.

Meanwhile, some Sun Belt markets, including Dallas and Houston, struggled with lower occupancy levels amid record-high supply.

Overall, average asking rents were up 0.2% YoY in May. Coincidentally, average asking rent rates have bounced within a narrow band of 0.1% to 0.3% for eight consecutive months now. It’s also a sign of growing stability in the market.

Although national rent growth remained subdued on an annual basis, monthly rent change displayed a more seasonal pattern. Monthly rents in May rose by 0.5%, the highest rate of change since June 2023. 

And despite a historical trend of deeper rent cuts in recent years, the market saw a slight rebound in monthly rent growth in 2024, with top performers like Milwaukee and Washington, DC leading the way. 

Why It Matters

The consistent occupancy levels and nuanced rent trends in the U.S. apartment market have been showing signs of stability for over half a year. But the story is very different region by region and metro by metro.

I’m an award-winning copywriter and digital marketing consultant who co-founded Tailored Ink. I help business owners and marketers craft the right messaging and create content at scale to grow their brands, generate leads, convert them into customers—and even get acquired by their competitors. As a member of Young Entrepreneur’s Council (YEC) and a columnist for sites like Forbes, Entrepreneur, and Business Insider, I also help mentor current and aspiring entrepreneurs and marketing professionals.
CRE Daily is a digital media company covering the business of commercial real estate. Our mission is to empower professionals with the knowledge they need to make smarter decisions and do more business.
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