Brace Yourself for 2024: Multifamily Rent Growth Set to Decline

As we move towards 2024, multifamily property owners and investors are set to experience a significant decline in rent growth, according to a recent forecast by Markerr. The report states that rent growth will be at 0.8%, which is the lowest it has been since 2020 when the pandemic began. However, the impact of this decline will differ based on the location of the property. For instance, in 2023, Sunbelt and Tertiary markets will outperform the top 100 averages while Coastal and Rustbelt markets will underperform. By 2024, the Rustbelt and Tertiary markets are expected to outperform the top 100 averages.

As per the MSA forecasts, Albuquerque is projected to have the highest rent growth in 2023, followed by Wichita, Tampa, North Port, Spokane, El Paso, Tulsa, Ogden, and Palm Bay. But by 2024, these markets are expected to fall to an average rank of 73 out of 100. Instead, Augusta, Albany, Syracuse, Baton Rouge, Sacramento, Grand Rapids, Jacksonville, Chattanooga, Cleveland, and Harrisburg are expected to take the lead.

As a digital multifamily brokerage and advisory firm, Offerd recommends that multifamily property owners and investors must keep a close eye on these regional differences to make informed decisions. For instance, the report predicts Winston-Salem, North Port, and Chattanooga will lead the top 100 markets at 8.6%, 8%, and 8% on a two-year compounded growth basis, respectively.

According to the report, home prices, multifamily permits, job growth, and occupancy rate are driving the forecast higher while median gross income is forcing it lower. It is important to note that unfavorable conditions such as population growth, historical multifamily rent growth, and median gross income may put markets like New York City in the bottom 10 of the compounded two-year growth forecast at -0.4%.

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