Multifamily sector underwent swift, unprecedented reversal in conditions throughout 2022

Across the board, multifamily fundamentals continued to deteriorate throughout the fourth quarter with limited absorption, significant imbalances between supply and demand, and ongoing economic uncertainty, according to Apartments.com, a CoStar Group company, in its in-depth report of multifamily rent growth trends for fourth quarter 2022.

“We ended the year with absorption barely remaining positive and vacancy rates trending upwards,” said Jay Lybik, national director of multifamily analytics at CoStar Group. “As 2022 progressed, economic uncertainty suppressed household formations, which limited multifamily demand. Consumer confidence started off weak early on with high inflation and the war in Europe, only to be continued by the Fed’s interest rate hikes and impending recession fears. With 2023’s national forecast predicting the highest new supply totals since the 1980s, expect vacancy to rise above 7 percent and rent growth to push much lower.”

Multifam