Multifamily Rental Market Trends 2023: Shift Towards Tenant-Favorable Conditions

As a leading digital multifamily brokerage and advisory firm, Offerd is closely monitoring the evolving trends in the U.S. multifamily rental market. 2023 has witnessed a significant influx of apartment units delivered nationwide, resulting in the highest vacancy rates since 2021. These market shifts are progressively becoming more tenant friendly.

According to a recent Redfin report, the number of completed multifamily rental units (properties with five or more units) has seen a robust increase of 60% YoY. The report states over 484,000 units were delivered in March 2023, marking one of the highest deliveries since the 1980s.

U.S. apartment vacancy rates have also risen to a two-year high of 6.4% in Q1 2023. As Redfin's Deputy Chief Economist Taylor Marr suggests, "The multifamily rental market dynamics are shifting in favor of tenants as the increasing supply meets demand."

Post-pandemic Sun Belt markets like Austin and Phoenix, among the top metros for multifamily building permits in March 2023, experienced decreases in asking rents by 14.3% and 9.6% respectively. Meanwhile, Midwest and Northeast markets continue to see rising rents, with Providence leading at a 16% increase.

Despite record-high apartment deliveries, some multifamily REIT executives view the slowdown in new construction starts as a potential opportunity. With fewer projects in the pipeline, the competition could decrease over the coming years, allowing landlords to potentially increase rents.

Stay updated with Offerd for more insights on multifamily rental market trends and how they may impact both tenants and landlords in 2023. With our expertise in multifamily brokerage services and real estate advisory, we’re committed to helping you navigate the complexities of this evolving market.