The multifamily industry’s record supply wave continued in the first quarter, with 116,092 market-rate units delivered over the last three months. According to RealPage’s first quarter analysis, this is on par with the prior quarter’s record high.
Demand also continued to surge as 138,302 units were absorbed in the first quarter. RealPage noted this was the highest first quarter reading ever recorded in its 32-year data set.
In the first quarter, the nation’s occupancy rate was at 95%, which has ticked up over the last year amid strong demand and is historically normal. Average effective asking rents rose 0.8% in the year-ending first quarter. While that rate registered below historically normal levels, it has increased modestly in recent months, especially in metros with lower supply.
The Sun Belt continued to see strong demand in the first quarter, particularly in Atlanta; Austin, Texas; Charlotte, North Carolina; Dallas; and Phoenix. In addition, RealPage noted Tampa, Florida; Minneapolis, and Southern California, with the exception of Orange County, also posted stronger than normal demand.
Midwest markets, which have seen less new supply come online, generally saw the highest rent growth.
With waning apartment supply combined with strong demand, RealPage forecasts rent growth will move toward more historically normal levels by the end of 2025.
Looking ahead to the second quarter, RealPage forecasts over 156,000 market-rate units to be absorbed, with demand expected to be robust in Charlotte, Dallas, Newark-Jersey City, and New York as those markets concurrently deliver high volumes of supply.
Approximately 585,000 units are under construction, with about 400,000 expected to deliver within the next year, growing the nation’s total inventory 2%. The South will see the bulk of new supply with about 200,000 additional units expected to be completed in the region in next 12 months.
On the metro level, Dallas, Newark-Jersey City, New York, and Phoenix are slated to be this year’s national supply leaders with each set to deliver over 20,000 new units in the next 12 months.
RealPage also noted new-construction pipelines are drying up the fastest in Austin; Jacksonville, Florida; Nashville, Tennessee; Raleigh-Durham, North Carolina; and San Antonio.
“In all five of these markets, the number of units delivered in the previous 12 months more than doubles the number of units forecasted to deliver in the coming 12 months,” according to RealPage.
