Multifamily Momentum: Strong Demand, Tight Supply, and Long-Term Resilience
Multifamily Absorption Surges Despite New Supply
- Over 145,000 units absorbed in Q1, outpacing 116,000 new deliveries
- Vacancy rate declined to 5.0%, lowest since late 2022
- Strong demand driven by job growth, favorable demographics, and affordability gap
Affordability Gap and Construction Slowdown Support Rents
- Median home payments near $3,163/month vs. $1,827 for average rent
- Multifamily lease renewal rate at 55%, above the long-term average of 53%
- Single-family and multifamily construction both slowing due to costs and policy
Short-Term Risks May Delay, Not Derail, Long-Term Demand
- Consumer sentiment dropped to 50.8 in April, may weigh on near-term household formation
- Long-term demand outlook remains strong despite near-term volatility
*Through 1Q
Sources: Marcus & Millichap Research Services, RealPage, Inc.
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