According to CBRE’s report, the U.S. multifamily market is experiencing a strong rebound due to decreasing vacancy rates and high demand for rental units. In the fourth quarter of 2024, there was a positive net absorption of 183,600 units – the strongest Q4 performance on record and significantly higher than pre-pandemic levels. This marks three consecutive quarters where demand has exceeded new construction completions, resulting in a smaller gap between annual completions and demand.
CBRE also noted that renter demand outpaced new deliveries in Q4 2024, leading to an overall multifamily vacancy rate of 4.9%, which is below the long-term average of 5%. Average monthly rents increased by 0.5% compared to last year’s figures, reaching $2,176 per month. With fewer construction completions expected this year and continued strong absorption rates predicted for upcoming months, rent growth is anticipated to accelerate.
Investor confidence has also been boosted by these positive fundamentals in the multifamily sector with $43.4 billion invested in Q3 alone – a significant increase from last year’s numbers.
Kelli Carhart from CBRE commented on this trend saying: “The robust performance of the multifamily market reflects high housing demands and indicates further strengthening of fundamentals.” She expects this trend will continue throughout most parts or all parts or all through-outmost areas during much if not all part if not every part throughout most areas during much if not every area overmuch time including some gains expected as early as late-2025 before accelerating even more rapidly into mid-to-late-2026; ultimately fueling greater investment activity within this sector.
In summary,the U.S.multifamily market continues its upward trajectory with improving fundamentals driving investor confidence.CBRE reports record-breaking net absorption numbers,a decrease in vacancies,and increasing rents.Additionally,the slowing paceof construction combined with sustained high-demand is expected to lead to even stronger rent growth in the near future.Investors are taking note of these positive trends,with a significant increase in investment activity seen in Q4 2024.CBRE predicts that this trend will continue and accelerate throughout 2025 and into mid-to-late-2026, making multifamily investments an attractive option for investors.
