Cushman & Wakefield released its Q1 2024 Multifamily Marketbeat report, which highlights the top trends and data points for the asset class from the previous quarter, also giving a peek into how the next quarter will shape up and providing critical insights for multifamily investors.
In Q1 2024, new economic data such as positive jobs reports, and lower numbers of construction starts, caused an uptick in overall demand for multifamily.
“A consistent theme since the fourth quarter of 2022 – demand has been on the rise. It is clear that this demand is powered by the resilient labor market, delivering the strongest demand since 2021,” said Sam Tenenbaum, Head of Multifamily Insights for Cushman & Wakefield. “The first quarter featured a resurgent labor market, with net employment increasing by roughly 830,000. At the same time, apartment demand surpassed 85,000 units, making Q1 the best quarter for demand since the pandemic’s boom year in 2021.”
In the report, Cushman & Wakefield explores the labor market’s impact on multifamily, a bright spot in stabilized vacancies, and how the new deliveries over the past year continue to affect rent growth.
For the past four quarters, rent growth has remained below 2% – about half the rate averaged from 2010-2020. In the first quarter, rent growth registered just 1.5% as new construction added to the competitive rental landscape. While rent growth remains in positive territory, the roughly 760,000 units under construction (or about 6% of inventory) will likely place further downward pressure on rent going forward until the market has time to absorb the new units.
At the same time, the report notes that construction starts are down 50% from a year ago, “setting the market up well for recovery.”
To read the full report, visit Cushman & Wakefield.