
Multifamily performance ended 2024 on a downswing, with the average U.S. asking rent falling $4 to $1,742 in December. Year-over-year growth decreased to 0.6%, marking the 16th consecutive month of increases below the 1% mark, according to the latest Yardi Matrix National Multifamily Report. The national occupancy rate in November was unchanged at 94.7%.
“The trends that shaped 2024 remained in place to the end,” noted the report. “Demand stayed robust throughout the year in most regions, so regional and market-level rent change was determined by the amount of local supply growth.”
Through the first 11 months of 2024, Yardi Matrix noted 404,000 multifamily units were absorbed nationally while 442,000 units were completed. According to the report, 8.5% more units came online than were absorbed, but regional differences abounded. For example, more units were absorbed than completed in the Midwest—62,000 absorbed versus 51,500 completions. The Northeast saw 53,000 units absorbed versus 46,400 completions.
There was more divergence on the metro level. Yardi Matrix pointed out that several markets stood out, such as suburban Chicago, which saw 3,000 units absorbed and only 900 completed, and central New Jersey, where 4,400 units were absorbed versus 1,600 completed.
The metros where completions outnumbered absorptions included San Antonio, where 3,300 units were absorbed versus the 8,800 completed, and Austin, Texas, where 12,300 units were absorbed compared with 21,000 units completed.
As had been the theme throughout 2024, year-over-year rent growth was highest in East Coast gateway metros and Midwest secondary markets in December. New York City again led the way at 5% growth year over year, followed by Kansas City, Missouri, at 3.9%; New Jersey at 3.8%; Chicago at 3.3%; and Columbus, Ohio, at 3.1%.
High-growth Sun Belt metros dominated the bottom of the rankings for year-over-year rent growth. Austin saw -5.9% year-over-year rent growth last month, followed by Raleigh, North Carolina, at -3.1%; Atlanta and Phoenix at -2.9%; and Denver at -2.2%.
Month over month, rents decreased 0.2% in December, with 20 of the top 30 metros posting rent drops. The national asking rent decrease was due to the lifestyle segment, which saw advertised rents dropping 0.3% last month. Rents for the renter-by-necessity segment declined by 0.1%.
On the single-family rental (SFR) and build-to-rent (BTR) side, asking rents also saw declines, falling $7 in December to $2,141, with year-over-year growth declining 40 basis points to -0.8%. Occupancy rates were unchanged at 95% in November. Kansas City; Grand Rapids, Michigan; and Columbus topped the list for the highest year-over-year rent growth, while Austin; Pensacola, Florida; and Dallas/Fort Worth were at the bottom of the list.
According to Yardi Matrix, asking rent growth underperformed multifamily last year, with the results varying by locations.
“SFR outpaced multifamily in some markets, primarily high-growth secondary metros such as Greenville, South Carolina; Salt Lake City; Denver; and Nashville, Tennessee. Many of these markets have negative multifamily advertised rents because of rapid supply growth, while SFR/BTR total stock remains small enough not to overwhelm demand,” noted the report. “In some metros, such as Miami and Cleveland, multifamily rent growth is positive while SFR growth is negative. In metros such as Phoenix and Jacksonville—where supply of both products is extremely high—both multifamily and SFR/BTR advertised rent growth are negative.”