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U.S. multifamily growth is expected to accelerate in the second half of the year amid slowing completions and continued positive net absorption, according to new research from CBRE.

CBRE research shows that average monthly rents in the first quarter ticked up 0.4% year over year, reaching $2,163.

During the first quarter, the nation saw 73,700 new units come online, boosting the rolling four-quarter total by 26% to a record 429,500 units, noted CBRE. A slowdown in multifamily starts in recent quarters will lower deliveries into 2025 and beyond.

The multifamily vacancy rate increased by 10 basis points in the first quarter, reaching 5.5%. Because of strong demand for multifamily, net absorption totaled 52,200 units for the quarter—the third-highest first quarter total in over two decades.

“Absorption has remained surprisingly resilient despite the record deliveries over the last few quarters,” noted Kelli Carhart, leader of multifamily capital markets at CBRE. “Investors continue to display a strong conviction toward multifamily. We expect multifamily capital allocation and deployment to increase as the year progresses.”

Other key findings from CBRE for the first quarter include:

  • The Midwest and Northeast saw positive year-over-year rent growth of 2.7% and 2.4%, respectively, across all markets;
  • Out of the 69 markets tracked by CBRE, 56 recorded positive net absorption for the quarter, with Orlando, Florida, 3,500 units; Austin, Texas, 2,700 units; and Denver, 2,500 units, leading the way;
  • Vacancy rates decreased in 27 markets compared with two markets in the fourth quarter; and
  • Multifamily investment volume saw the lowest quarterly total since the second quarter of 2020, falling by 28% quarter over quarter to $19.8 billion.