The U.S. multifamily market is rebounding strongly, driven by declining vacancy rates and robust absorption, according to CBRE’s latest research.
Positive net absorption, which measures the change in the number of occupied units, reached 183,600 units in Q4 2024, the strongest fourth-quarter performance on record and 12 times more than the pre-pandemic Q4 average. This marks the third consecutive quarter where demand surpassed new completions, further narrowing the annual completions-over-demand gap.
Healthy renter demand outpaced new deliveries in Q4 2024, lowering the overall multifamily vacancy rate to 4.9%, pushing it below its long-term average of 5.0%.
Average monthly rents increased 0.5% year-over-year in Q4 2024, reaching $2,176. With construction completions slowing and strong absorption persisting, rent growth is expected to accelerate in the coming months.
While a record 450,000 new units were delivered in 2024, the pace of construction starts has moderated, which will help to balance supply and demand dynamics in the coming years.
Investor confidence in the multifamily sector is evident, with investment activity surging in Q4 2024. A total of $43.4 billion was deployed into the sector, representing an increase of 59% year-over-year.
“The strong performance of the multifamily market reflects significant demand for housing and signals the continued strengthening of fundamentals,” said Kelli Carhart, leader of Multifamily Capital Markets for CBRE. “We expect to see more positive gains throughout 2025 and then accelerating in 2026, fueling increased multifamily investment activity.”
Other Q4 2024 Multifamily Sector Highlights:
• The Midwest (2.8%), Northeast (2.3%), and Pacific (0.4%) regions experienced solid year-over-year rent growth. Rents fell in the Southeast, South Central and Mountain regions.
• All 69 markets tracked by CBRE recorded positive net absorption in Q4 2024, with New York (18,600 units), Houston (10,400) and Dallas (8,800) leading the way.
• Sixty-four markets saw net absorption exceed new supply in Q4 2024, up from 50 markets in Q3 2024 and 45 in Q2 2024.
• Vacancy rates declined in 63 markets quarter-over-quarter in Q4 2024, up from 56 markets in Q3 2024.
Read the full report here.
