MARKET SNAPSHOT
Currently, 19,239 units are under construction in the Atlanta market, representing a 3.5% expansion of the metro’s existing market-rate inventory. However, this figure has fallen below the market’s historical average for the first time since 2020. While the pipeline remains substantial, Atlanta’s share of under construction inventory is smaller compared to other Sun Belt markets such as Phoenix, Charlotte, Nashville, and Austin. Furthermore, the pipeline is expected to decline rapidly, as multifamily starts dropped nearly 50% in 2024, and the number of deliveries is projected to decrease by a similar margin in the coming year.
Construction hot spots in Atlanta span both urban and suburban areas, with fast-growing Gwinnett County and the densifying Midtown leading the way, with anticipated completions in 2025. Downtown Atlanta, though a smaller submarket, has one of the highest shares of inventory under construction, with nearly 20% of its supply underway. Significant investments tied to the upcoming 2026 World Cup have positioned Downtown as a key development area, with CIM Group adding hundreds of units to its mixed-use entertainment district near Mercedes-Benz Stadium and State Farm Arena. In South Downtown, new developers are transforming the area into an entrepreneurial village, which includes plans for additional apartments. Meanwhile, Atlanta’s BeltLine, a multiuse trail spanning several submarkets, continues to attract significant development, with 2,000 units currently under construction within half a mile of the trail. This underscores its role as a catalyst for growth and urban revitalization.
Although the under construction inventory remains sizable, all key development activity metrics in Atlanta have fallen below 10-year averages for the first time since the onset of the pandemic, marking a notable shift in development activity trends. Additionally, with the recent wave of new supply, negative rent growth, and tightening credit markets, groundbreakings are likely to remain limited in the near term. However, Atlanta’s long-term appeal as a Sun Belt destination suggests that development will rebound in the medium term in a more sustainable way.
After experiencing more move-outs than move-ins in 2022, Atlanta’s multifamily market has seen rising net absorption since early 2023. For the first time in nearly three years, net absorption exceeded new completions in the most recent quarter. However, the previous surge in new apartment supply has left its mark, with the market’s overall occupancy rate stabilizing at 90%, slightly below the ten-year average of 93%. Occupancy rates are expected to remain stable in the short term as the remaining newly completed buildings lease up. They may increase over time, as absorption levels are anticipated to remain above historical norms due to Atlanta’s growing population and expanding economy. According to the U.S. Census Bureau, Atlanta is the third-fastest-growing metro area in the nation, and inbound renter households will support stability in occupancy rates in the coming year.
Urban and core-suburban submarkets in Atlanta benefit from the region’s rapidly expanding population of highly educated workers. Although layoffs in the technology sector may temper the pace of new hiring this year, the Atlanta area continues to produce more than 40,000 college graduates annually, ranking it among the top 10 metros nationwide in this regard. Additionally, Atlanta has a significant pool of renters seeking workforce housing, supported by the city’s strong industrial sector. These jobs help sustain demand for more affordable properties, particularly in submarkets such as Douglas County, Outlying Gwinnett County, and areas south of Atlanta, including Henry County and Southeast DeKalb.
New completions had outpaced net absorption in Atlanta over every quarter since mid-2021, placing downward pressure on market rents. However, that dynamic reversed at the end of 2024, and rent decreases began decelerating soon after. Looking ahead, rent growth is expected to rebound as the construction pipeline shrinks and newly completed buildings reach full occupancy. Positive average annual rent growth is projected to return by Q2 2025 and reach just below 2% by the end of the year.
The strongest pockets of rent growth are found outside Atlanta’s urban core, where rental rates are more affordable, construction activity has been lower, and most outlying exurban metro counties are already experiencing year-over-year rent increases. In contrast, all Atlanta submarkets with 12,000 or more units saw rent declines in 2024. These areas have experienced substantial growth or are adjacent to rapidly expanding submarkets over the past several years. Nevertheless, nearly all 39 submarkets in Atlanta are forecasted to have positive rent growth by the end of 2025 as supply and demand fundamentals continue to improve and concessions usage declines.
12-month period ending November 2024
According to MMG’s 2024 Employment Expansion Trend Report, Atlanta is projected to experience steady job growth, with its employment base expected to expand by 8% through 2029—highlighting the metro’s strong economic momentum. As the third-fastest-growing metro area in the U.S., Atlanta continues to attract inbound renter households, further reinforcing market fundamentals and supporting a return to rent growth in the year ahead.
Net absorption has surpassed new completions for the first time in nearly three years, signaling stabilizing market conditions. While a past surge in supply temporarily pressured occupancy rates, they are expected to remain stable as newly completed units lease up. With the construction pipeline contracting, new completions are forecasted to decrease by nearly 50% in 2025. This slowdown is anticipated to ease supply-side pressures, paving the way for rent growth to rebound, with an annual increase of 1.9% projected by year-end. Nearly all submarkets are forecast to experience positive rent growth as supply and demand fundamentals improve.
Overall, Atlanta’s rapidly expanding population coupled with rising household formation and a shrinking construction pipeline indicate that the multifamily market is on track for continued improvement in 2025 as supply and demand dynamics become more balanced.
