As of 2023’s first quarter, the average multifamily rental unit is $699 less than the total median monthly home payment, Newmark said in its Q1 United States Multifamily Capital Markets Report. “Renting has become significantly more economical than owning a home, driven by the growth in debt costs,” the report stated. That’s expected to continue driving demand.
Following three quarters of negative demand, Q1 saw absorption rebound to 19,243 units. Looking ahead into 2023, demand is expected to advance even further, reaching the highest levels since t3 2021 and well above the long-term average.
New supply will also see a large increase, expected to reach nearly 550,000 in 2023 and an all-time high of nearly 588,000 units in 2024.
Both quarterly and trailing 12-month vacancies spiked in the first quarter of 2023, reaching 5.2% and 4.4%, respectively, stated the report. However, both are below the long-term average of 5.4%.
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