Though operational expenses in multifamily assets continue to grow and sit roughly 39% above where they were prior to the pandemic, the pace of increase has slowed to the lowest level since early 2021. Across nine operational expense categories, all but two – utilities and payroll – moderated over the last 12 months.
The most significant decline has been in insurance growth, which fell to just over 7% on an annualized basis in 1st quarter 2025. That compares to an incredible increase of 33.5% just one year prior. Taxes, another pain point for property owners as they account for roughly 30% of total OPEX costs, also registered a substantial drop. This time last year, taxes were growing by nearly 4% annually on average. But through the end of March 2025, the cost of taxes per unit on a national level have fallen 50 basis points (bps) year-over-year.
This theme of moderation has been seen across the country. All regions of the U.S. have seen expense growth fall below the change rates reported annually at the beginning of 2023 and 2024, albeit at varying levels. In total, two-thirds of regions registered an annual average expense growth in 1st quarter 2025 below their average growth in the five years ending 2019.
Source: RealPage
Multifamily Market News 