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Market Report

Tucson Multifamily Market Report

3Q 2023

Elevated Homeownership Costs and Significant
Hiring Plans Buoy Apartment Demand Prospects

Tight single-family market aiding Class A rental metrics. Over the 18 months trailing June, the difference between a typical monthly mortgage payment on a median priced home and the mean monthly rent for top-tier apartments in Tucson nearly doubled, rising to $1,060. Responding to elevated homeownership costs, a growing portion of locals are remaining in the renter pool for longer. This is most apparent in the Class A sector, with top-tier apartments recording the lowest rise in vacancy among class cuts during the past year. As a result, Tucson’s top-tier metric was at least 50 basis points below other segments in June, after having the highest average rate among classes during the past three years. With the metro’s single-family permitting activity also slowing to a half-decade low in early 2023, a notable lack of new housing inventory should continue to direct residents to Class A options long-term, benefiting performance in the segment.

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