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Resurgence in Multifamily Investment: Q4 2024 Sees Record Demand
The US multifamily market is experiencing a robust recovery, driven by dwindling vacancy rates and insatiable demand. According to CBRE's latest research, the sector has seen a significant surge in investment activity, with a 59% year-over-year increase in Q4 2024.
Net absorption, a key indicator of occupied unit changes, reached an impressive 183,600 units in Q4 2024, marking the strongest fourth-quarter performance on record. This milestone is particularly noteworthy as it outpaced new completions for the third consecutive quarter, narrowing the annual supply-demand gap.
Renter demand has consistently exceeded new deliveries, resulting in a vacancy rate of 4.9% in Q4 2024 – slightly below the long-term average of 5.0%. Average monthly rents rose by 0.5% year-over-year to $2,176, with construction completions slowing and strong demand expected to fuel accelerated rent growth.
A record 450,000 units were delivered in 2024, but new construction starts have eased, which should help stabilize supply and demand over time. Investor confidence remains high, with investment activity surging by 59% year-over-year in Q4 2024, totaling $43.4 billion in capital deployment.
"The multifamily market's strong performance reflects the significant demand for housing and signals a continued strengthening of fundamentals," said Kelli Carhart, leader of Multifamily Capital Markets for CBRE. "We expect to see more positive gains throughout 2025 and then accelerate in 2026, driving increased multifamily investment activity."
Regional highlights include:
* The Midwest (2.8%), Northeast (2.3%), and Pacific (0.4%) regions experienced solid year-over-year rent growth.
* Rents fell in the Southeast, South Central, and Mountain regions.
* All 69 markets tracked by CBRE recorded positive net absorption in Q4 2024, with New York (18,600 units), Houston (10,400) and Dallas (8,800) leading the way.
* Sixty-four markets saw net absorption exceed new supply in Q4 2024, up from 50 markets in Q3 2024 and 45 in Q2 2024.
* Vacancy rates declined in 63 markets quarter-over-quarter in Q4 2024, up from 56 markets in Q3 2024.
