- 2024 saw the delivery of over 500K new apartment units, matching robust renter demand, with national occupancy holding steady at 94.3%.
- Lease renewals hit 55%, a rare high, as operators seek to mitigate turnover costs in an oversupplied market.
- Rent concessions will continue in high-supply markets, while lower-supply areas are poised for modest rent growth like in the 2010s.
- Multifamily starts fell to their lowest levels since 2013, signaling potential housing shortages in 2026 and beyond.
The multifamily housing sector found stability in 2024, with the largest supply increase since 1974 matching the strongest demand in decades.
Consequently, RealPage predicts that in 2025, multifamily operators will focus on tenant retention as high supply challenges rent growth in major metros.
By The Numbers
National occupancy rates averaged 94.3%, slightly below historical norms but reflective of healthy market conditions.
Resident retention surged, with 55% of renters renewing leases—a trend driven by flat annual rent growth (less than 1%) and growing affordability.
Supply was still elevated, with 60% more units under construction compared to the average seen in the 2010s. Despite this, new multifamily starts slowed, reaching their lowest levels since early 2013.
Demand Drivers
Strong wage growth, cooling inflation, and high single-family home prices have bolstered multifamily demand. Renters are benefiting from improved affordability, while single-family homeownership remains financially out of reach for many.
Meanwhile, supply and demand are currently in near-equilibrium, with over 500K units added in 2024. However, a dramatic decline in new multifamily starts suggests future supply challenges, particularly post-2025, when housing shortages could re-emerge.
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2025 Predictions
RealPage forecasts 2025 as a year focused on renter retention and affordability. Key trends include:
- Supply moderation: While 500K new units are expected to be delivered in 2025, economic headwinds are expected to slow the pipeline, particularly in 2026 and beyond.
- Market imbalances: Rent growth will remain subdued in high-supply areas like the Sun Belt, while tighter markets will see more traditional rent appreciation.
- Affordability gains: Wage growth outpacing rent increases is helping to improve apartment affordability, further fueling demand.
- Tenant retention: With abundant supply in certain metros, operators will prioritize tenant retention to mitigate rising turnover and marketing costs. High-supply markets may see ongoing rent concessions, while lower-supply areas maintain modest rent growth.
Looking Ahead
The multifamily market enters 2025 on stable footing, but the rapid slowdown in new construction suggests potential challenges beyond the coming year.
For now, renters will enjoy improved affordability and greater choice, as supply continues to reshape market dynamics. “2025 will be the year of the resident,” said Carl Whitaker, Chief Economist at RealPage. “Increased affordability, more rental options, and a focus on retention will shape the multifamily housing landscape.”
Meanwhile, multifamily operators must balance high inventory levels with strategies to retain tenants and maintain occupancy rates.
