⬇️ ⬆️ Rents may be heading back up
Empty apartments are starting to fill up
The 1.2 million new apartments built over the past two years are filling up fast. If demand stays high, the economy stays strong, and housing prices remain near record levels, landlords could have more control over rent prices starting next year. This could give building owners a chance to raise rents more than they have in recent years.
Multifamily construction is moving back into recovery with promising projections for 2025.
Vacancy rates are also low with the current apartment vacancy rate at 4.2% which is below the 10-year average of 4.6%. Demand for apartments remains strong, and as new units become available in 2025 demand is expected to keep pace.
In Q3 2024, the U.S. absorbed a record number of apartment units which has been driven by international migration and a strong job market. After a period of stability, rent growth is accelerating again with a year-over-year increase of 2%.
At the same time, fewer new units are under construction, which points to tighter vacancies and potentially higher rents. This trend suggests that in 2025 we’ll likely see both rising rent prices and increased occupancy rates.