MARKET SNAPSHOT
Developers remained active in the Cincinnati region in 2024, delivering approximately 3,800 new units, just below the record 3,900 units completed in 2023. However, the development pipeline is expected to moderate, with deliveries projected to decline by 13% in 2025 and drop more sharply in 2026. Over the past 12 months, Northern Kentucky led the market in deliveries, accounting for 37% of new units. Most of these additions were located in Florence along I-71. Significant development activity also occurred in northern Cincinnati, with the Northeast Cincinnati and North Cincinnati submarkets contributing a combined one-third of the region’s total deliveries.
Despite higher construction financing costs, apartment construction starts have risen compared to recent years, bringing the number of units under development to 4,900. This figure is approximately 1,000 units above Cincinnati’s 10-year historical average but remains well below the late 2022 peak when 6,523 units under development. While Cincinnati has experienced a surge in new developments, its overall inventory expansion, though significant locally, remains more moderate compared to many other major markets. Although the higher development levels have led to a slight increase in vacancies, the impact has been relatively minor compared to the supply expansions seen in other markets. This is evident in Cincinnati’s current average occupancy rate of 94.1%, which remains above the national benchmark of 93.8%.
Looking ahead, Northeast Cincinnati is expected to remain a key hub for development activity, with 1,300 units currently under construction, representing 7.9% of the submarket’s inventory. This area, encompassing much of Warren County, is one of the fastest-growing regions in the Cincinnati metro, with its population rising by 3.7% between 2020 and 2023, compared to 0.9% growth for the metro overall, according to demographic data from CoStar. Other submarkets with notable development activity include Downtown Cincinnati, with 1,027 units underway, and Northern Kentucky, with 673 units under construction.
Multifamily occupancy in Cincinnati remains comfortably above the national average as of early 2025, standing at 94.1% compared to the national benchmark of 93.7%. Mid-tier units have experienced a strong rebound in net absorption, driven by rising consumer confidence and increased household formation among younger renters. Over the past 12 months, net absorption in this segment more than doubled the pre-pandemic average.
While high-end units account for the majority of new supply nationally, Cincinnati has maintained a relatively balanced distribution between mid-tier and high-end deliveries. Over the past year, the influx of mid-tier units resulted in a 40-basis-point decline in average occupancy to 94.2%, despite above-average net absorption. Class A units saw a slightly steeper decline of 80 basis points, though occupancy in this segment remains solid at 93.8% as of Q4 2024. Lower-tier properties demonstrated consistent performance, with average occupancy holding steady at approximately 94.0% year-over-year.
Despite another active year of completions anticipated in 2025, occupancy is projected to improve over the next 12 months, rising by 30 basis points to 94.4% by year-end. This improvement reflects an expected balance between net absorption and new supply, creating a healthier market equilibrium. Furthermore, Cincinnati’s occupancy rate remains significantly above peer markets and the national average, positioning the metro for continued strong performance in 2025.
Rent growth in Cincinnati remained stable, averaging between 2.5% and 3.0% over the past four quarters. This strong performance has placed the Cincinnati metro among the top 15 major apartment markets in the U.S. for rent growth in 2024. Unlike many other markets, Cincinnati’s construction activity has been relatively restrained, preventing an oversupply that might suppress rental growth. This environment has allowed operators to achieve above-average rent gains consistently.
Across the quality spectrum, rent growth has been robust, including in the high-end property segment, which has avoided the deep cuts experienced in many of the nation’s major markets. Over the past four quarters, Class A property rents grew by 1.5% to 2.5%, ending Q4 2024 up 1.8% year-over-year. Mid- and lower-tier properties, however, have been the main drivers of growth, with rents increasing slightly above 3.0% over the same period.
Looking ahead, Cincinnati is expected to sustain healthy rent growth. Class A rents are forecasted to accelerate toward 3%, while Class B and C properties are projected to achieve annual increases of just over 4.0% by Q4 2025. This will result in a marketwide annual rent growth rate of 3.7% by year-end.
12-month period ending November 2024
The Cincinnati multifamily market enters 2025 on solid footing, with stable fundamentals and a well-balanced supply-demand dynamic. Occupancy rates remain strong at 94.1%, comfortably above the national benchmark of 93.7%, reflecting the market’s resilience amidst steady development activity. Although elevated completions slightly pressured occupancy in 2024, the development pipeline has moderated from recent peaks, with 4,900 units currently under construction. This level, while above the 10-year historical average, is well below the late-2022 peak of 6,523 units, ensuring manageable inventory expansion. Demand continues to be robust, particularly in mid-tier and high-end segments, driven by rising consumer confidence and increased household formation among younger renters. Key submarkets such as Northeast Cincinnati and Northern Kentucky remain development hotspots, with Northeast Cincinnati leading construction activity as population growth in Warren County outpaces the metro average.
Looking ahead, the market is positioned for healthy rent growth and further stabilization. Rent growth is forecasted to reach 3.7% by year-end 2025, with Class A rents accelerating toward 3% and mid- and lower-tier properties achieving gains just over 4%. Occupancy rates are expected to rise by 30 basis points, reaching 94.4% by year-end, as demand absorbs new supply and the market achieves equilibrium. Cincinnati’s balanced approach to development, with a relatively even distribution of mid-tier and high-end deliveries, has prevented the oversupply challenges seen in other markets, allowing it to maintain steady performance. Supported by a diverse economic base, strong population growth in key submarkets, and a manageable construction pipeline, Cincinnati is well-positioned for continued outperformance relative to peer markets and national trends.
