• The historic peak in U.S. apartment completions is now in the rearview mirror.
• Completions reached about 150,000 units in the last 3 quarters of 2024 but then dropped to 113,000 units in the first quarter of 2025.
• Completions will remain moderately elevated this year before plummeting in 2026.

Source: Jay Parsons

• No one player owns more than 1% of U.S. apartments.
• The top 50 owners combined own only 11% of U.S. apartments.
• In most other major industries, a single company typically owns more market share than the top 50 largest apartment owners combined have of the apartment market.
• The low teens ownership percentage range has been pretty stable for decades:

It’s interesting to note that while the largest apartment owners actually have fewer units than they did 11 years ago, the largest third-party property managers have growth the number of units they manage significantly.

Source: Jay Parsons

• In the January to March quarter, the U.S. absorbed over 138,000 market rate apartment units, marking the highest 1st quarter demand on record.
• Occupancy continued to tick up modestly throughout the early months of 2025 to stand at 95.2% in March. This was the highest reading seen since October 2022.
• Effective rents grew 0.75% in March. In turn, effective rents grew 1.1% in the year-ending March 2025, which marked the highest reading since June 2023.

Source: RealPage

A little over 576,700 units were delivered in the year-ending 1st quarter 2025. That was slightly below the all-time peak of 585,200 units from calendar 2024. From this point on, delivery volumes are scheduled to drop off for the next few years as developers wrap up the current pipeline of projects.

Annual supply is scheduled to drop to about 431,200 units by the end of 2025. After that, deliveries are expected to fall off even further, returning to more historic norms by 2026 if current construction timetables hold.

Source: RealPage

Americans need to earn $116,633 per year to afford the median priced home for sale. That’s 81.8% more than the $64,160 they need to afford the typical apartment for rent—and the gap has been widening. 

The cost of buying a home is rising faster than the cost of renting, which is why there’s a growing gap between the income someone needs to afford their own home versus an apartment. The median home-sale price rose 4.5% year over year to $423,892 in February, and has been growing at roughly that pace for months.

The typical U.S. household earns an estimated $86,382—roughly $30,000 less than the income required to afford the typical home for sale. Meanwhile, the median asking rent rose just 0.2% year over year.  

Source: Redfin

1	Hawaii	13.9%
2	New York	13.6%
3	Vermont	11.5%
4	California	11.0%
5	Maine	10.6%
6	New Jersey	10.3%
7	Illinois	10.2%
8	Rhode Island	10.1%
9	Maryland	10.0%
10	Connecticut	9.9%
11	Minnesota	9.7%
12	New Mexico	9.6%
13	Massachusetts	9.6%
14	Utah	9.5%
15	Ohio	9.4%
16	Kansas	9.3%
17	Iowa	9.2%
18	Indiana	9.1%
19	Mississippi	9.1%
20	Oregon	9.1%
21	Louisiana	8.9%
22	Kentucky	8.9%
23	Virginia	8.9%
24	West Virginia	8.9%
25	Nebraska	8.8%
26	Colorado	8.7%
27	Nevada	8.6%
28	Washington	8.6%
29	Arkansas	8.6%
30	Pennsylvania	8.6%
31	Georgia	8.5%
32	Wisconsin	8.3%
33	Michigan	8.3%
34	Arizona	8.2%
35	North Carolina	8.2%
36	South Carolina	8.2%
37	Alabama	8.0%
38	Montana	7.9%
39	Missouri	7.8%
40	Texas	7.8%
41	Idaho	7.5%
42	Oklahoma	7.0%
43	North Dakota	6.6%
44	Delaware	6.5%
45	Florida	6.5%
46	South Dakota	6.5%
47	Tennessee	6.4%
48	New Hampshire	5.9%
49	Wyoming	5.8%
50	Alaska	4.9%

The graphic below shows how state income taxes have changed between 2000 and 2025. The gray states have no taxes. Changes are not compared for four states (Rhode Island, Vermont, North Dakota, and Colorado) since their 2000s tax rates were charged as a percentage of federal liabilities owed. As a result, they have been grayed out on the map

And the highest marginal income tax by state, shown below:

The Federal Reserve’s Interest Rate Decision, Statement & Press Conference – 3/19/25

Inflation moving in the wrong direction: The trend reversed suddenly in October 2024 when inflation rose to 2.6%. It then rose further in November 2024 hitting 2.7% then rose again to 3.0% in January 2025, the highest rate since last July. The reading for February 2025 was 2.8%, (the latest data available).

From Powell: “A good part of [expected inflation] is coming from tariffs” and “inflation may be moving up due to tariffs.” Powell added that, “There are going to be tariffs and in the short-term they tend to bring inflation up.”

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CRE & Multifamily Debt: Extend & Pretend Continues Into 2025

• Nearly half of all commercial real estate loan maturities expected to hit this year were pushed back from years prior as the extend-and-pretend game continues.
• Of the $957 billion in commercial real estate debt coming due in 2025, $348 billion was due last year and was pushed into 2025
• Multifamily represents the highest volume of extensions within all CRE sectors
• There’s an additional $663 billion in CRE debt that needs to be refinanced in 2026

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The Rising Cost Of Insurance Continues To Challenge Multifamily Operations

• Over 50 percent of the overall operating expense inflation for multifamily housing owners since 2020 can be attributed to increases in property insurance premiums.

• From 2021 to 2022, respondents reported an average annual premium increase of 14 percent, followed by 22 percent from 2022 to 2023, and a staggering 45 percent from 2023 to 2024. By 2024, property insurance premiums were, on average, double those in 2021.
• Rising property insurance costs are forcing owners to choose between increasing deductibles or reducing coverage to mitigate higher costs, leaving them vulnerable in the event of property damage.
• Owners are frustrated with the increasing number of coverage exclusions, indicating that fewer causes of damage are eligible for reimbursement. They are saying that there are so many exclusions that a new policy is like a book. You nearly need an attorney to read it to see if you actually have any coverage. 
• Insurers most often tie premium increases to weather risks, claims histories, and buildings’ physical characteristics, explanations that survey respondents generally found unsatisfying. 
• Rising insurance costs have particularly dire implications for affordable housing providers. They have less flexibility to raise rents to cover increasing insurance costs and often face stricter limits on rent increases due to funding requirements.

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A New Problem For Fractured Condo Investors: Insurance – 3/17/25

• Condominium owners across the country are facing a paralyzing problem: They can’t sell their properties because of a fast-growing and mostly secret mortgage blacklist.
• The blacklist is maintained by Fannie Mae and includes condo associations that the mortgage finance giant thinks don’t have adequate property insurance or need to make critical building repairs. Being on the list can make it harder for potential buyers to get a mortgage.
• Fannie Mae greatly expanded the list after the Surfside condo collapse in Florida in 2021 killed 98 people. Compounding the problem, a nationwide insurance crisis is making it more expensive for condo associations to afford adequate coverage. 
• The number of properties that fail to meet Fannie Mae’s standards has risen to 5,175 this month from a few hundred before Surfside

The list below shows the top 20 metro areas for domestic migration last year. This shows where people are moving to when excluding international immigration.

Source: Jay Parsons