The multifamily market is beginning to show signs of improvement and stabilization—but still has challenges ahead in certain areas, such as a rising level of concessions.

A new report from MRI Real Estate Software found that move-in numbers have improved, behind only 3% compared to last year as of September. On the other hand, concession volume is up 21% compared to last year, while concessions values are up 13%. Since April, concession values have increased 82%.

Like move-in rates, new applications have increased in step. Traffic, on the other hand, has decreased since hitting a post-pandemic peak in June. However, traffic is still above 2019 numbers. Landlords have also increased adoption of leasing technologies during the pandemic to drive leasing activity, and it has worked. As a result, there has been improving new leasing and move-in activity for multifamily.

Tenant move outs have been flat since July and peaked in June following the pandemic. Now move-out activity is below 2019 levels. Renewals, however, decreased in September and are down compared to 2019. The take away, according to the MRI report, is that tenants are staying in place during the pandemic.

The MRI report isn’t the only outlet to report improved apartment leasing activity. A recent report from RealPage also showed an improvement in leasing during the third quarter, up 8% year-over-year and more than four time the activity in the second quarter.

But while leasing activity has improved during the pandemic, concessions have moved in the other direction. In September, there was a significant jump in concessions from August—which was the first rental month after the CARES Act benefits expired. Landlords are offering incentives to prospective tenants, which has likely helped to drive strong leasing activity. Concessions now total nearly $6 million.

The concessions, however, haven’t helped to stabilize rental rates. Rents are down 3% in September, despite the increase in concessions. In addition, pricing compared to renewal term is down the lowest since the start of the pandemic for longer lease terms and the highest it has been since the start of the pandemic for shorter lease terms. During the pandemic, many tenants have shifted to shorter lease terms, but twelve-month lease terms, which are an industry standard, have started to normalize again. New lease term prices are trending 3% below 2019 numbers.

Future leasing activity trends remain uncertain. Unemployment rates, government relief plans, economic recovery and the upcoming election will all play a role in the viability of multifamily leasing in the end of the year and in 2021. Landlords should budget for these considerations.