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Market Report

Minneapolis-St. Paul Multifamily
Market Report

2024 Investment Forecast

Tempered Construction Aids Performance;
Investors Drawn West of the Mississippi

Regionally strong inventory growth ebbs. Apartment vacancy in the Minneapolis-St. Paul metro was among the nation’s lowest for major markets leading up to 2020. This prompted builders to increase local stock at a rate faster than any other Midwestern market between 2019 and 2023. This rapid supply expansion coincided with household consolidation, as noted by a lower two- and three-bedroom vacancy rate relative to one-bedroom units. The pace of arrivals, however, tames in 2024. Minneapolis-St. Paul’s reduced level of construction may benefit existing Class A properties, as the segment entered 2024 with a compressed marketwide vacancy rate year-over-year. First- and second-ring suburbs are realizing this momentum as luxury renters continue to prefer corridors like Burnsville-Apple Valley, Minnetonka and South Minneapolis-Richfield. Meanwhile, dynamics in Central St. Paul have normalized entering the year. Despite amendments made to the city’s rent control ordinance in 2023, which exempts assets built within the last 20 years, mid- and upper-tier vacancy ebbed closer in line with pre-pandemic norms.

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