US Multifamily Market Overview
In the third quarter of 2024, the gap between homeownership and rental costs reached an impressive $1,203, marking a 7.6% increase year-over-year. With mortgage interest rates at record highs, renting remains substantially more affordable than buying, a trend unlikely to reverse until rates ease. Homebuying has become especially prohibitive as the average 30-year fixed-rate mortgage now sits at 52.8% above the effective rate on existing mortgage debt. This elevated spread
suggests a limited likelihood of a resurgence in home sales until the disparity between rental and ownership costs narrows.
As of this quarter, demand has outpaced supply in 48 of the top 50 U.S. rental markets, the fourth consecutive quarter with such high demand. Strong rental uptake has driven down the national vacancy rate, which peaked at 5.9% in early 2024, to 5.6% by the third quarter, reflecting robust demand despite being 10 basis points higher than a year ago. This stability indicates the beginnings of a balanced market, although vacancy fluctuations remain modest. Sunbelt markets are leading the nation in inventory growth and unit deliveries, with Dallas and Austin at the forefront, followed closely by Atlanta and Houston, each adding approximately 25,000 new units over the past year. However, annual demand as a percentage of inventory reached 2.5% in the third quarter of 2024—a threshold that has been met or
exceeded only six times since 2000 in trailing twelve-month demand.
Rental demand reached 192,649 units in the third quarter, a remarkable 134.6% increase from the prior year and 117.3% higher than the long-term average. The rolling four-quarter demand for rental units has consistently risen for six consecutive quarters, totaling 488,773 units. In tandem, supply saw a record-breaking addition of 162,595 new units, surpassing the prior record of 149,896 units set in the previous quarter. However, projections indicate a deceleration in new unit deliveries through the fourth quarter and into 2025 and 2026.
Cioffe Enterprises [CEI]
Cioffe Enterprises, Inc. 