“Market Dynamics Are Shifting in Favor of Multifamily Landlords”

Takeaways:

• The multifamily market is witnessing a dramatic adjustment. National vacancy readings leveled off for the first time in three years in Q3 2024, as new unit deliveries slowed and a growing pool of renters leased up available units.
• New unit deliveries are projected to decline further. CoStar data shows a 55% reduction in expected unit completions in 2025, and permit issuance reveals a continued thinning of the supply pipeline thereafter.
• Demand is increasing as several forces unleash pent up need for rental units. In contrast to renting, purchasing a home continues to represent an expensive and unattractive alternative.
• As the supply of new units continues to decline and increased demand for rentals absorbs the current available inventory, leverage will continue to shift in favor of multifamily landlords and investors.