The multifamily sector is facing challenges as supply deliveries continue to moderate rent growth, according to recent reports from Yardi Matrix and Apartment List. While Yardi Matrix reported a year-over-year rent growth rate of 0.7%, Apartment List noted that the national rent growth rate was still in negative territory at -0.8%.
One of the main factors contributing to slow rent growth is the high volume of new inventory hitting the market, combined with sluggish demand. This trend is expected to continue as there are a record number of new apartment units set for delivery in 2024.
Despite this, both reports also highlighted some positive signs for the multifamily sector. Yardi Matrix pointed out an increase in household formation leading to ongoing demand for apartments, while Apartment List noted that although rents have dipped over the past twelve months on average, they are still significantly higher than they were at the start of 2021.
In terms of vacancy rates, both reports showed relatively steady numbers with occupancy rates around 94%. However, it’s important to note that vacancy trends can vary greatly by location and have been closely monitored throughout the pandemic.
Overall, while there may be short-term challenges due to ongoing supply deliveries and fluctuating demand levels across different markets nationwide,the long-term outlook remains optimistic for multifamily properties once these issues are resolved.
