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Multifamily Occupancy Returns to 94%

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Multifamily Occupancy Returns to 94%

Picture of Chris Nebenzahl

Chris Nebenzahl

Given the potential for a significant change in economists’ expectations heading into last week’s releases, the domestic economy has been relatively steady over the past several days. The CPI was released last Wednesday showing a modest decline in inflation. The Fed announced later that day that they expect to cut rates once this year, although that is once again subject to change if inflation or the job market changes drastically. However, the market is taking the Fed’s commentary as a positive. Treasury yields are down about 20 basis points since last Monday, and the equity markets have performed well, with the S&P 500 gaining 2.4% in the past week. While some were expecting significant volatility in the economy, last week’s numbers and commentary were mostly stabilizing.

Multifamily continues its steady journey, but last week marked a significant milestone, as the national occupancy rate returned to 94%. While this threshold by no means marks the immediate return to growth for all multifamily markets, it meaningfully represents the stable growth in housing demand. Leading indicators were once again flat last week, and rent growth continued its slow march upward, as the national average net effective rent increased another 10 basis points.

Key Takeaways – Data as of 06/16/2024

Traffic and Leases:

  • Traffic and leasing at the national level remained unchanged last week, with the conversion ratio staying at 33%. Despite the slowdown in both traffic and leasing compared to prior years, the conversion ratio has held its own by historical standards.
  • Chicago led all markets, picking up nearly a full tour per property last week. Its average weekly traffic across the metro area returned to double digits last week, making the Windy City the fourth strongest market in the country for total traffic.
  • Leasing remains highest in the sunbelt, as Orlando ranks first, averaging 3.8 new leases signed per week. The rest of the top 10 markets for highest leasing activity are in the sunbelt. In fact, the strongest leasing market not in the sunbelt is Chicago, which ranks 18th in overall leasing activity.


Occupancy and ATR:

  • Nationwide occupancy rose two basis points last week to 94.0%. Occupancy is up 30 basis points from its trough in November and is now down only 26 basis points year-over-year.
  • Midland, TX had a bounce back week, adding 74 basis points of occupancy, followed by several mid-Atlantic markets. The Carolinas, Virginia and Maryland continue to see steady occupancy growth.
  • ATR remains tight and the average property nationwide has 13 units coming available over the next 60 days.


Net Effective Rent:

  • Net effective rents grew to $1,823 at the national level, as Q2 rent growth has been slow and steady.
  • Detroit has quietly been putting together a strong year, capped off by tremendous rent growth last week. Rents in the Motor City are up 4%, year-over-year and occupancy is above 95%.
  • 30 of the 45 markets tracked by Radix Research saw rents increase last week, as is typical this time of year. Rents will likely begin to flatten over the next six to eight weeks.
  • Columbus rents may be cooling early. After a strong start to the year, rents flatlined throughout the second quarter and dipped 1% over the past month.


Revenue Per Available Unit:

  • Revenue per available unit also increased 10 basis points at the national level. On an annual basis RevPAU remains down 1.7%.
  • Driven by tremendous rent growth and strong occupancy growth, Detroit topped the RevPAU rankings last week as well.
  • On an annual basis, Reno and Washington D.C. share the top spot, as RevPAU has increased 4.5% in both markets.
  • Austin maintains the lowest ranking in annual RevPAU growth, followed by Raleigh, yet both secondary tech hubs saw RevPAU increase last week.

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Picture of Chris Nebenzahl
Chris Nebenzahl
Chris Nebenzahl is the Director of Economic Research at Radix, where he oversees all macroeconomic and multifamily market analysis. Chris has 15 years of multifamily experience in data analytics, research, asset management and acquisitions. Prior to his time in the multifamily industry Chris was a portfolio manager at Bank of New York, focusing in the government and commercial fixed income sectors.
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