Multifamily National Report

Stability emerges as demand catches up to record construction. The net absorption of nearly 260,000 apartments across the opening two quarters of this year exceeded the prior 12-month total by almost 35,000 units. Surging demand, stimulated by rising household creation as inflationary pressures cooled, held national vacancy at 5.8 percent entering the second half of 2024, unchanged from the start of this year. Strength was spread across the quality spectrum from April to June 2024, with all three apartment tiers notching 10-basis-point vacancy reductions quarter over quarter. Still, the overall midyear rate stayed 40 basis points above the long-term second-quarter average, as historic construction is counterbalancing robust demand. Supply pressure will remain a near-term headwind for vacancy, with roughly 1 million units underway nationwide as of July. Development has likely peaked, however, as multifamily project starts fell by more than 18 percent year over year during that month, while permits decreased by 15 percent.