DALLAS – Global real estate and investment firm CBRE reports multifamily deliveries in the United States reached a record high in Q4 2023 as rental growth slowed during the same period.
New construction deliveries reached a new high of 140,800 units in Q4 2023, bringing the four-quarter total to a record 416,500 and “fewer construction starts in recent quarters indicates there will be a decrease in deliveries in 2025 and beyond,” a release stated.
“Record new construction was met with robust renter demand in the fourth quarter. We anticipate investment activity to pick up beginning in the second quarter, driven by the Fed’s likely rate cuts, which will help improve capital markets conditions. An uptick in loan maturities will also create transaction opportunities for distress-focused investors,” CBRE multifamily capital markets leader Kelli Carheart said in a statement.
The multifamily vacancy rate rose by 20 basis points (bps) quarter-over-quarter to 5.4 per cent in Q4 2023 and net absorption reached 84,800 units in Q4 2023, more than four times the pre-pandemic Q4 average.
The U.S. midwest and northeast were the only regions to experience positive year-over-year rent growth across all markets in Q4 2023, the release said, with the midwest leading with 2.7 per cent down from 2.9 per cent in Q3 2023, followed by the northeast with 2.4 per cent down from 2.9 per cent. Southeast, south central, mountain and pacific regions all saw negative average rent growth.
Of 69 markets tracked by CBRE, 56 recorded positive net absorption in Q4 2023, with New York (8,800 units), Austin (6,700) and Atlanta (6,000) in the lead. The top five markets for new deliveries in 2023 – New York, Dallas, Austin, Houston and Atlanta – accounted for 27 per cent of the national total.
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