Adobe Stock/AI

Amid historic multifamily supply coming online, occupancy and rent change fundamentals held steady in May, according to data from RealPage Market Analytics.

After softening throughout most of 2022 and 2023, occupancy for U.S. apartments in May, 94.2%, was in line with readings seen in the first four months of 2024.

According to RealPage, an unchanged occupancy reading at a time of increased apartment deliveries indicates that renters continue to absorb the new units at healthy rates. For 17 consecutive months, the occupancy needle hasn’t moved more than 10 basis points in either direction, and it has remained stable so far in 2024.

“May marked the seventh straight month in which occupancy has held at or above 94.1%, further solidifying the idea that the nation has reached a point of stabilization,” said RealPage chief economist Carl Whitaker. “Though May’s occupancy, 94.2%, was static month over month and therefore underperformed typical expectations, the broader idea that occupancy has found its level amid a 40-plus-year high supply wave remains a testament to the depth of the nation’s demand for apartments.”

Occupancy ticked up marginally or remained unchanged across all four regions in May, increasing 10 basis points month over month in the Midwest and Northeast and staying flat in the South and West.

Eight of the nation’s 50 largest markets—Richmond, Virginia; West Palm Beach, Florida; San Francisco; Las Vegas; Detroit; Greensboro/Winston-Salem, North Carolina; and Sacramento and San Jose, California—saw year-over-year increases in occupancy last month.

However, several Sun Belt markets saw lower occupancy readings among record supply rates. All five major Texas apartment markets—Austin, Dallas, Fort Worth, Houston, and San Antonio—were less than 93% occupied in May.

Monthly rent changes, while muted by historical measures, looked more seasonal. According to RealPage data, effective asking rents for professionally managed apartments inched up 0.2% year over year in May.

“In the May readings, national rent growth ultimately weathered the supply siege as well,” noted Whitaker. “But similar to occupancy, this marked the eighth straight month in which annual effective asking rent change held between 0.1% and 0.3%.”

Month over month, rents grew by 0.5% in May, which indicates a more normal seasonal figure.

“May’s monthly rent growth marked the highest month-over-month rate of change since June 2023 and just 10 basis points off the average May dating back to 2010,” he said. “The monthly rate of change outpacing that of annual change is largely a result of deeper-than-usual rent cuts in the back half of 2023.”

Only five of the largest apartment markets saw rents grow year over year by 3% or more. Milwaukee led the way at 3.5%, followed by Washington, D.C.; Kansas City, Missouri; Cincinnati; and Greensboro/Winston-Salem. According to RealPage, this is the fewest number of markets to record more than 3% rent growth since July 2020.

Nearly half of the largest apartment markets, 46%, experienced year-over-year rent cuts in May. Austin had the deepest cut at -7.1%. Jacksonville, Florida; Atlanta; San Antonio; and Raleigh/Durham, North Carolina, all had cuts deeper than 4% year over year in May.

Month over month, 45 out of the 50 top markets posted some level of rent growth, with RealPage noting this is an indication that the deepest rent cuts are likely in the rearview for most locales. The only major markets to post month-over-month rents cuts last month were Tampa, Atlanta, Phoenix, Salt Lake City, and Miami.