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Shifts in Housing Market Emphasize Rental
Options Among Existing Residents
Homeownership barriers encourage apartment leasing. Net absorption continues to reflect robust new renter demand, with the first two quarters of 2024 seeing more than double the levels from previous years — likely driven by local residents. Household formation and population growth are sluggish compared with historical trends, indicating that demand is not coming from new arrivals. A widening gap between median home prices and Class A rents, along with slowing income growth and an aging population, is expanding the renter base among both current renters and potential homeowners. Restrictive lending, decreased home affordability and an influx of new apartments are all shifting interest toward multifamily units. In the first six months of 2024, Class A and B properties saw vacancy rate declines of over 140 and 100 basis points, respectively.