The chart below shows the multifamily debt held by various classes of suppliers as of Q2 2024. It’s important to keep this data in mind when you see a headline that says something like “3% of CMBS loans are now in default.” Those loans in default represent about 0.30% of the total multifamily debt outstanding.
Source: YieldPro
Oxford Economics forecasts that the U.S. population of adults ages 20-34 (prime apartment renter demographic) will decline by 947k people over the next 10 years.
However, these 10 states are still projected to see substantial growth, with North and South Carolina making the list.
Source: Jay Parsons
Wage growth has outpaced rent growth for 20 months, nearly erasing the 2021-2022 rent price surge.
Source: Jay Parsons
The blue areas have experienced gains since the 2022 national peak, while the red areas have declined.
Source: Lance Lambert
From RealPage: Another 50,000 or so units are scheduled to deliver in the Southeast over the next 12 months, but roughly 10% of that will likely experience a delay, as suggested by historical delivery patterns. With interest rates still elevated, fewer projects have been breaking ground. As a result, new construction activity has been declining for the past few quarters and is set to continue its downward trend in the near term.
Americans say the most desirable midsize cities are:
Americans say the 10 most underrated cities in the U.S. are:
Source: Clever
Berkadia anticipates that 2024 will have the highest number of deliveries in this cycle with 283,653 units already delivered in the first half of the year. By year-end, 629,153 new units are expected to hit the market. Berkadia expects net absorption of 612,115 units by year-end, equivalent to 97.3 percent of the new supply. This will result in the current occupancy rate of 94.2 percent rising slightly by the end of the year.
Lease renewals performed better with average rent growth of 4.1 percent in Q2, with 54.3 percent of renters choosing to renew their leases. This renewal rate is up from the pre-pandemic average of 51.7 percent.
The following table gives the mid-year sales statistics for the last 3 years as reported by Berkadia.
| Statistic | 2022 | 2023 | 2024 |
| Volume – billions | $59.3 | $14.6 | $18.4 |
| Transactions | 738 | 184 | 239 |
| Average rent | $1,736 | $1,809 | $1,828 |
| Cap rate | 4.0 | 5.2 | 5.6 |
| Units/property | 303 | 318 | 304 |
| Average Year Built | 2000 | 1999 | 2000 |
Source: Conor Sen
Where are Class C rents growing most? In markets with little new supply. Class C rent growth topped 4% in 22 of the nation’s 150 largest metro areas, and nearly all of them have limited new apartment supply.
Most new construction tends to be Class A “luxury” because that’s what pencils out due to the high cost of everything from land to labor to materials to impact fees to insurance to taxes, etc., but when you build “luxury” apartments at scale, you will put downward pressure on rents at all price points.
Source: Jay Parsons
CMBS loans make up a small percentage of the total multifamily debt, but the number of loans distressed within that sector has grown dramatically over the last 7 months.
Source: Cred iQ
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