Multifamily ended 2023 on a downswing, after average U.S. multifamily asking rents dropped for five straight months, according to a recent report by Yardi Matrix. The average asking rent fell $17 over those five months to $1,709.
Discounting the 2020 pandemic year’s 0.1 percent gain, 2023’s full-year rent growth of 0.3 percent was the weakest rent performance since the 0.2 percent increase in 2010. And rents are likely to remain stuck in neutral during the early part of the new year.
With all that said, how worried should the market be going into 2024? While it is prudent to prepare for downside scenarios, conditions may not be as weak as they appear on the surface.
Maybe most importantly, household formation and the strong job market should continue to maintain demand. Apartment absorption totaled 285,000 in 2023 through November, per Matrix, which is in line with recent years when rents rose robustly. Absorption has remained healthy across the country, eve