- US apartment occupancy rates rebounded to 94.8% by the end of 2024, a level consistent with the market’s long-term norms.
- The market saw a record volume of new apartment supply last year, which initially pushed occupancy rates down to 94.1%.
- Class B apartments, the largest segment of the market, saw the strongest rebound, overtaking Class C as the tightest asset class by the end of the year.
- Occupancy increased in all three asset classes (Class A, B, and C) in 2024, with Class B leading with an 80 bps gain.
The US apartment market saw serious fluctuations in 2024 but finished the year on a positive note, with occupancy rates returning to historically normal levels, per RealPage.
By The Numbers
After dipping to a recent low of 94.1% early in the year due to a record influx of new apartment supply, demand surged, helping occupancy close the year at 94.8%. This marked a return to the long-term norm for apartment occupancy, a trend driven largely by Class B apartments, which saw the strongest recovery across all asset classes.
The US apartment market delivered a record volume of new units last year, which initially pressured occupancy rates downward. By early 2024, occupancy dropped to a low of 94.1%.
However, demand quickly picked up, particularly in 2H24, allowing occupancy to climb back up to 94.8% by EOY. This rate aligns closely with the long-term average for apartment occupancy last seen in the 2010s and consistent with the pre-pandemic average from 2015 to 2019 (95.2%).
Class B Makes The Grade
Much of the recovery in occupancy was driven by the performance of Class B apartments—the largest and historically most stable product class. By EOY, Class B stock overtook Class C units to become the tightest asset class, with an occupancy rate of 95%.
This marks a reversal from previous trends, where Class C units typically held the highest occupancy rates, especially during the early stages of the pandemic.
Class B apartments saw the most growth in occupancy, shooting up 80 bps. By comparison, Class A and Class C units saw more modest gains of 50 bps each. With Class B apartments comprising nearly half of the nation’s existing apartment stock, the sector’s recovery played a pivotal role in boosting overall occupancy.
Broader Market
Although occupancy across all three asset classes—Class A, B, and C—shot up in 2024, none returned to their pre-pandemic averages. Still, the YoY improvement across all categories points to a broader market recovery.
With demand strengthening in 2H24 and the largest increase seen in Class B units, the overall outlook for the apartment market heading into 2025 looks positive.
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What’s Next?
Despite a slow start, the US apartment market showed a remarkable recovery in 2024, closing the year with occupancy rates at historically normal levels. The strongest rebound came from Class B apartments, underscoring the resilience of this large and essential segment of the market.
With demand continuing to rise and supply moderating, the apartment sector appears poised for steady growth as we move into 2025.
For more insights and forecasts on the US apartment market, including what to expect in 2025, be sure to tune into the webcast Market Intelligence: 2025 U.S. Apartment Market Outlook.
