Phoenix Multifamily Market Report
2024 Investment Forecast
Elevated Net In-Migration Sustained By
Regional Cost-of-Living Advantage
Phoenix attracts budget-conscious renters. Rent growth in the U.S. surpassed wages in both 2021 and 2022, leading to higher housing costs that are now impacting household formation. Still, Phoenix’s cost-of-living advantage is sustaining elevated net in-migration, which in turn is helping the multifamily sector navigate such challenges. At the onset of 2024, the average effective Class A rent comprised 28 percent of the local mean monthly household income, the lowest among major Southwest markets. The advantage becomes even more evident compared to the 40-plus percent ratios of nearby San Diego, Tucson and Los Angeles. The regionally affordable cost of living, aided by recent, supply-related limitations to rent increases, has subsequently supported strong demand for new apartments. This trend of considerable stock growth and high rental demand is most evident in Avondale-Goodyear-West Glendale, Central Phoenix and Gilbert. These neighborhoods have hosted substantial development over the past five years, and will welcome an additional 13,000 units collectively in 2024. The relative affordability of new, top-tier apartments here will likely continue to attract numerous relocating renters. Class A rates in these areas are below all but one major submarket in Southern California, making them an appealing option for a diverse pool of potential transplants. Below-average unemployment amid continued hiring is additionally adding tailwinds to top-tier demand, with many professional, business, and financial services companies having to recruit from outside of the metro.