Multifamily Rent Stabilizes Slightly in Q1 2024

Recent findings from Dallas indicate a stabilization in multifamily fundamentals as per first-quarter data analysis.

Rent growth over the past year remained consistent, with a marginal increase of 0.4% compared to Q4 2023. CBRE’s forecast suggests this trend will persist in the near term before a potential uptick in the latter half of the year.

The average monthly rent for multifamily units stood at $2,163 during this period.

Quarter-over-quarter, the vacancy rate inched up by 10 basis points to reach 5.5%. CBRE expects this trend to continue through the middle of the year.

Several markets are experiencing higher vacancy rates than their long-term averages due to recent spikes in construction completions.

The first quarter saw 73,700 new units completed, contributing to a record four-quarter total of 429,500 units. However, a slowdown in construction starts suggests a moderation in these numbers in the coming years.

Net absorption in the first quarter reached 52,200 units, marking the third-highest first-quarter absorption in the past two decades and surpassing the pre-pandemic average by 47%.

Kelli Carhart, the leader of Multifamily Capital Markets at CBRE, noted, “Absorption has remained surprisingly resilient despite the record deliveries over the last few quarters.” She expects an increase in multifamily capital allocation and deployment as the year progresses.

Annual net absorption, at 301,700 units, exceeded the pre-pandemic average by 15% and showed significant growth compared to the previous year.

However, multifamily investment volume witnessed a 28% decline in the quarter, totaling $19.8 billion—the lowest since Q2 2020. The rolling four-quarter investment volume also dropped by 50% to $111.7 billion, marking the lowest total since 2014.

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