Detroit Multifamily Market Report

Rental demand backstopped by comparative affordability. Detroit’s shrinking population and slowing rate of household formation are the greatest headwinds to multifamily properties in the market. Additionally, the metro’s mean effective rent increased by 26 percent from 2019 through 2022, encouraging renters to utilize cost-cutting measures, such as moving in with roommates. These factors will generate supply-centric complications as many projects that broke ground in 2021, following record-low vacancy, are slated to come online this year. A misalignment of supply and demand will place upward pressure on vacancy; however, this year will close out with availability still 10 basis points below the metro’s long-term average. Residents may be further prompted to remain in the renter pool longer amid rising barriers to homeownership, as the median household income in Detroit has not kept pace with inflation and home prices.