- Apartment demand in the US hit its highest level in over 30 years in 2024, greatly outpacing new supply, which saw decades-high volume.
- Five major markets, including Washington, DC, and Houston, reported excess demand of over 3,000 units per metro area.
- The West and South regions saw the biggest imbalance in supply-demand dynamics.
The demand for US apartments shot up to its highest level in over 30 years in 2024, according to RealPage Market Analytics.
By The Numbers
This surge came even as new supply also hit its highest point in decades, with nearly 589K units delivered throughout the year. Yet the market absorbed nearly 667K units, creating an excess demand of about 78K units overall.
The imbalance was noticeable in large metros, where urban demand significantly outpaced supply. Notably, the South and West saw the greatest demand surpluses, with markets like Washington, DC, and Houston seeing the largest gaps.
Capital on Top
DC led the nation with an excess demand of 7.74K units in 2024. The city absorbed nearly 22K units while receiving less than 14.2K in new supply.
This massive demand push helped push occupancy in the capital up by 130 bps YoY, reaching 96%. Yet DC’s market only ranked #6 nationally for occupancy, revealing how hard it is to keep up with demand even in already tight markets.
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Houston Demand Surge
Houston placed second for excess demand, absorbing nearly 32K units while new supply hit around 25K units. This imbalance created a demand surplus of 6.85K units, and occupancy in Houston climbed by 120 bps YoY to 93.8%.
However, Houston’s occupancy rate still lagged behind the national average, ranking in the bottom 10 among the nation’s largest markets. This indicates the city’s ongoing struggle to meet housing demand despite a significantly higher absorption.
Rounding Out The Top 5
In the West, Las Vegas and Los Angeles recorded substantial excess apartment demand.
Las Vegas absorbed 9.7K units while only receiving 5.4K units of new supply, resulting in a demand surplus of a little over 4.3K units. This, in turn, led to a 200 bps YoY increase in occupancy, bringing it to 94.6%.
Similarly, Los Angeles absorbed nearly 10K units, with 6.87K units delivered, leading to a 30 bps increase in occupancy to 95.4%.
The only other large market surpassing 3K units of excess demand in 2024 was Indianapolis. The Midwest market absorbed nearly 9.5K units against 6.4K units of new supply, creating a surplus of nearly 3.1K units. Occupancy in Indianapolis rose by 200 bps YoY to reach 95%.
The Bigger Picture
Overall, these trends highlight a broader regional pattern where demand is outpacing new construction, especially in the South and West.
As the market adjusts to rising demand, it will be crucial for multifamily developers to boost supply in these high-demand markets to maintain balance and avoid straining the rental market.
