2025 Multifamily Market Outlook: Clearer Skies Ahead
Based on preliminary third-party data, multifamily rental growth is estimated to have turned negative during the fourth quarter of 2024, after having been positive earlier in the year. Our prediction of instability in the multifamily market last year was correct, but we do expect it to start improving in most places in 2025. Rental demand in 2024 differed depending on the metro: Those with a lot of new supply, such as Austin, Phoenix, San Antonio, and Raleigh, have seen negative rent growth over the past year. In contrast, metros that are supply-constrained, such as Chicago, Cleveland, Cincinnati, and Louisville, have seen above-average rent growth, according to data from RealPage. At a national level, rental demand remained positive for much of 2024, due to ongoing job growth and rising wages, with elevated mortgage rates and continued higher single-family housing prices keeping many tenants renting.