Apartments.com Releases Multifamily Rent Report for the Fourth Quarter of 2024
Today, Apartments.com – an online marketplace of CoStar Group, Inc. – published an in-depth report on multifamily rent trends for the fourth quarter of 2024.
National year-over-year asking rent growth eased to 1.0% in December 2024 compared to 1.1% at the end of September 2024. Since mid-2023, year-over-year rent growth has hovered around 1% after its rapid deceleration in 2021 and 2022.
The national rent per unit closed the year at $1,729, compared to $1,712 recorded at the end of 2023. Quarter-over-quarter rents fell by 0.4%, the second consecutive quarter of falling rents. The vacancy rate held steady at 8.0%.
The fourth quarter recorded 113,200 units of absorption, the second consecutive quarter of easing. Supply additions in the quarter numbered 133,300, once again exceeding absorption, a trend seen since the fourth quarter of 2021. However, the gap between supply and demand is now at its smallest over that same period, suggesting more balanced market conditions. For the full year 2024, absorption reached 556,800 units, a 70% increase over the prior year.
At 3.2%, Detroit ended the fourth quarter with the strongest annual asking rent growth of the top 50 markets nationwide, with Kansas City and Cleveland close behind at 3.0% and 2.8%, respectively. Five of the top 10 markets for annual asking rent growth are in the Midwest, highlighting the strength of markets that avoided large run-ups of supply over the past three years.
At the opposite end of the spectrum, annual asking rent fell by 4.8% from the previous year in Austin. Denver, San Antonio, Jacksonville, and Phoenix performed somewhat better, with annual asking rent declines of the prior year ranging from 2.9% to 2.1%. Eight of the ten weakest-performing markets are in the Sun Belt, where oversupply conditions remain challenging.
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Absorption during the year was led by 4&5-Star units, with just over 429,000 units absorbed in the fourth quarter. However, with most new supply aimed at the luxury market, annual asking rent growth remained the weakest in that segment at 0.2%, coupled with a vacancy rate of 11.4% at the end of 2024. In contrast, year-over-year rent growth of mid-priced assets reached 1.3% at the end of 2024 with a vacancy rate of 7.3%. Improving consumer confidence, lower inflation, and sustained economic expansion likely helped boost demand in this segment.
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Matthew Blocher, Vice President Corporate Marketing & Communications at CoStar Group