Apartments.com Releases Multifamily Rent Growth Report for Second Quarter of 2024
July 10 2024 - 2:30PM
Business Wire
Today, Apartments.com – a CoStar Group online marketplace –
released an in-depth report of multifamily rent trends for the
second quarter of 2024
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240710296231/en/
U.S. Apartment Rent Growth (Graphic:
Business Wire)
The U.S. multifamily market continued a strong rebound in demand
during the second quarter of 2024, with 170,000 units absorbed, the
highest number since the third quarter of 2021. And while 180,000
new units were delivered in the last quarter, this was the smallest
supply-demand gap in 11 quarters. So, the vacancy rate remained
steady from the first quarter to the second quarter at 7.8%. This
is the first quarter in which the vacancy rate has not risen in
almost three years.
The national average annual asking rent growth dipped slightly
to 0.9% in June compared to 1.0% in the four prior months. Since
mid-2023, annual rent growth has hovered around 1% after a rapid
deceleration in 2021 and 2022. Month-over-month rent growth
decelerated to 0.1% after seeing three months in a row of 0.4%
growth.
Midwest and Northeast markets have avoided oversupply conditions
and tied with solid rent growth of 2.4% over the past four
quarters, while markets in the West experienced rent growth of just
0.5% as weak demand and elevated completions have kept rent growth
restrained but positive. Meanwhile, continued heavy oversupply
conditions in the South have kept annual rent growth at zero.
At 4.9%, Louisville ended the second quarter with the strongest
annual asking rent growth of the top 50 markets nationwide, with
Cleveland and Washington DC close behind.
At the opposite end of the scale, rents fell by 5.7% over the
past 12 months in Austin. Tucson, Raleigh, Jacksonville, and
Atlanta were just a little behind, with rent losses ranging from
3.1% to 2.2% over the past 12 months. Eight of the bottom ten
performing markets are in the South, where supply-demand imbalances
remain challenging.
Absorption was led by 4&5-Star units, with just over 123,000
units in the quarter. However, with most new supply aimed at the
luxury market, annual asking rent growth remained the weakest in
that segment and finished June at 0.2%. This contrasts with
mid-priced 3-Star properties, where net absorption increased from
33,000 units in the first quarter to 43,000 units during the second
quarter, helping rent growth to accelerate to 1.5%. Improving
consumer confidence, lower inflation, and sustained economic
expansion helped boost 3-Star demand.
Improving consumer conditions can also be observed in demand for
1&2-Star properties. After two years of negative absorption,
the lowest price point finally turned positive in 2024. Households
at this price point struggled in 2022 and 2023 with higher housing
costs and the elevated costs of everyday items, pushing some to
seek alternative housing solutions such as moving in with roommates
or returning to the family home. But in 2024, 1&2 Star demand
has registered almost 6,000 units.
After completions of multifamily units reached a 40-year record
in 2023, the outlook this year is for continued high supply. The
multifamily market is projected to add 574,000 units in 2024, which
is only a slight pullback from the prior year’s record. Property
operations in the second half of 2024 could vary widely depending
on the market and the price point. Markets in the South and luxury
properties remain most at risk for weakness due to oversupply
conditions, while Midwest and Northeast locations and mid-priced
3-star properties could outperform.
ABOUT COSTAR GROUP, INC.
CoStar Group (NASDAQ: CSGP) is a leading provider of online real
estate marketplaces, information, and analytics in the property
markets. Founded in 1987, CoStar Group conducts expansive, ongoing
research to produce and maintain the largest and most comprehensive
database of real estate information. CoStar is the global leader in
commercial real estate information, analytics, and news, enabling
clients to analyze, interpret and gain unmatched insight on
property values, market conditions and availabilities.
Apartments.com is the leading online marketplace for renters
seeking great apartment homes, providing property managers and
owners a proven platform for marketing their properties. LoopNet is
the most heavily trafficked online commercial real estate
marketplace with over twelve million monthly global unique
visitors. STR provides premium data benchmarking, analytics, and
marketplace insights for the global hospitality industry. Ten-X
offers a leading platform for conducting commercial real estate
online auctions and negotiated bids. Homes.com is the fastest
growing online residential marketplace that connects agents,
buyers, and sellers. OnTheMarket is a leading residential property
portal in the United Kingdom. BureauxLocaux is one of the largest
specialized property portals for buying and leasing commercial real
estate in France. Business Immo is France’s leading commercial real
estate news service. Thomas Daily is Germany’s largest online data
pool in the real estate industry. Belbex is the premier source of
commercial space available to let and for sale in Spain. CoStar
Group’s websites attracted 170 million quarterly average monthly
unique visitors for the first quarter of 2024. Headquartered in
Washington, DC, CoStar Group maintains offices throughout the U.S.,
Europe, Canada, and Asia. From time to time, we plan to utilize our
corporate website, CoStarGroup.com, as a channel of distribution
for material company information. For more information, visit
CoStarGroup.com.
This news release includes "forward-looking statements"
including, without limitation, statements regarding CoStar's
expectations or beliefs regarding the future. These statements are
based upon current beliefs and are subject to many risks and
uncertainties that could cause actual results to differ materially
from these statements. The following factors, among others, could
cause or contribute to such differences: the risk that new unit
deliveries do not occur when expected, or at all; and the risk that
multifamily vacancy rates are not as expected. More information
about potential factors that could cause results to differ
materially from those anticipated in the forward-looking statements
include, but are not limited to, those stated in CoStar’s filings
from time to time with the Securities and Exchange Commission,
including in CoStar’s Annual Report on Form 10-K for the year ended
December 31, 2023, which is filed with the SEC, including in the
“Risk Factors” section of those filings, as well as CoStar’s other
filings with the SEC available at the SEC’s website (www.sec.gov).
All forward-looking statements are based on information available
to CoStar on the date hereof, and CoStar assumes no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240710296231/en/
NEWS MEDIA: Matthew Blocher Vice President CoStar Group
Corporate Marketing & Communications (202)-346-6775
mblocher@costar.com
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