MARKET SNAPSHOT

2025 Detroit Forecast

2024

FORECASTED ANNUAL CHANGE

2025

$1,312

Q4 AVG. EFFECTIVE RENT

3.8%

FORECASTED ANNUAL CHANGE

$1,362

Q4 Avg. Effective Rent

93.4%

Q4 AVG. OCCUPANCY

+40 BPS

FORECASTED ANNUAL CHANGE

93.8%

Q4 Avg. Occupancy

2,154

2024 COMPLETIONS

2,097

10 Yr. Avg. Annual Completions

1,741

2025 COMPLETIONS

4,195

2024 NET ABSORPTION

1,715

10 Yr. Avg. Annual Net Absorption

3,024

2025 NET ABSORPTION

Source: CoStar
Key Market Themes for 2025
  • DETROIT RANKED #2 IN U.S. RENT GROWTH IN Q4 2024

    Detroit's strong rent growth performance of 3.4% in the final quarter of 2024 placed it second among the nation's 50 largest apartment markets by inventory, narrowly trailing San Jose, CA, by just 10 basis points.

  • WORKFORCE HOUSING OCCUPANCY SEES STRONG GAINS IN 2024

    Occupancy in metro Detroit’s workforce housing segment rose by 90 basis points in 2024, reaching 93.2% by year-end. The increase reflects growing demand from essential workers, such as teachers, police officers, and firefighters, as renters sought affordable, value-driven housing options.

  • METRO DETROIT DEVELOPMENT PIPELINE TO MODERATE FURTHER IN 2025

    An estimated 1,741 units are projected for delivery across metro Detroit in 2025, marking a 17% decline from the previous year. This reduced supply is expected to bolster occupancy rates, particularly within the high-end property segment.

2025 SUPPLY TRENDS

MULTIFAMILY STARTS DECREASED IN 2024

MULTIFAMILY STARTS DECREASED IN 2024

2023: 2,270 units > 2024: 1,197 units

Annual Increase of 1,073 units or -47%

10 Yr. Historical Annual Average: 2,358 units

UNITS UNDER CONSTRUCTION TRENDING BELOW THE 10 YEAR AVERAGE

UNITS UNDER CONSTRUCTION TRENDING BELOW THE 10 YEAR AVERAGE

2,579 units under construction as of December 31st 2024

10 Yr. Historical Annual Average Units UC: 3,997

35% Higher than historical average

UNIT COMPLETIONS PROJECTED TO DECREASE IN 2025

UNIT COMPLETIONS PROJECTED TO DECREASE IN 2025

2024: 2,154 units > 2025: 1,741 units

Annual Decrease of 413 units or -19%

10 Yr. Avg. Annual Completions: 2,123 units

Over the past five years, more than 15,500 apartment units have been delivered across metro Detroit, expanding the region’s inventory by approximately 5%. Last year, around 2,150 new units entered the market, closely aligning with the area’s 10-year average. The majority of these deliveries were concentrated in key submarkets, including Downtown Detroit, Macomb County, Livingston County, and Troy/Rochester. Downtown Detroit led all submarkets with 500 new units, while Macomb County—home to the region’s largest inventory—added 380 units over the same period.

Looking ahead, an estimated 1,741 units are expected to be delivered in 2025, with the highest concentrations in Northwest Oakland County (394 units), Downtown Detroit (321 units), and Birmingham/Bloomfield (150 units). While these submarkets are not seeing a significant influx of new supply, they remain key areas of interest. Northwest Oakland County continues to attract demand as it is home to some of metro Detroit’s fastest-growing outer-ring communities, offering a blend of suburban expansion and accessibility. Meanwhile, Birmingham/Bloomfield, one of the region’s most affluent areas, maintains its strong appeal due to its top-tier school districts and high-quality lifestyle amenities.

2025 RENT & OCCUPANCY TRENDS
ANNUAL RENT GROWTH & OCCUPANCY
OCCUPANCY TRENDS

Renter demand consistently outpaced unit completions throughout 2024, resulting in a healthy 50-basis-point increase in the average occupancy rate for the metro Detroit apartment market last year. This upward trend was particularly evident in the mid- and lower-tier segments, where occupancy rates rose the sharpest. The most notable gains were seen in the low-priced tier—commonly referred to as the workforce housing segment—which serves essential workers such as teachers, police officers, firefighters, and other blue-collar professionals. This segment experienced a significant occupancy increase of 90 basis points, pushing the average rate to 93.2% at the close of 2024. The rise in occupancy suggests that many metro Detroit area renters prioritized affordability and efficient living accommodation throughout last year.

In contrast, the high-end segment experienced a modest decline, with the average occupancy rate falling by approximately 20 basis points to 92.8% by year-end 2024. Despite Detroit’s relatively modest development pipeline compared to national trends, the majority of new deliveries in 2024 were concentrated in the high-end segment, contributing to the slight occupancy decline.

However, looking ahead to this year, with a reduced delivery schedule, occupancy rates in the high-end segment are projected to rebound modestly, increasing by 20 basis points to 93.0% by the end of 2025. The mid-tier segment is forecasted to see a 50-basis-point improvement, reaching 94.2%, while the workforce housing segment is expected to climb 30 basis points to 93.5%. Overall, the metro-wide occupancy rate is projected to rise by 40 basis points, reaching 93.8% by the end of 2025.

RENT TRENDS

At the end of the fourth quarter of 2024, the Detroit metro recorded an average annual effective rental growth rate of 3.4%, reflecting an increase of approximately 100 basis points over the past 12 months and closely aligning with the decade-long average of 3.5%. Notably, this performance positioned Detroit as the second highest among the nation’s 50 largest apartment markets for annual effective rent growth, trailing only San Jose, CA, by a narrow margin of 10 basis points.

Detroit’s rental market demonstrated remarkable stability throughout 2024, with the lowest recorded annual rent growth at 2.3% in the first quarter of the year, a full 140 basis points above the national benchmark during the same period. This consistent performance is largely attributed to the metro’s moderate pace of construction in recent years, contrasting sharply with many Sun Belt markets that experienced rapid inventory expansion, leading to softened rent growth over the past six to eight quarters.

Looking ahead to 2025, the Detroit metro apartment market is expected to once again outperform many of the nation’s major markets, driven by a modest development pipeline and steady household growth. During the typically slower winter leasing period, rental growth is projected to experience a slight dip of approximately 10 basis points to 3.3%. However, momentum is anticipated to build heading into the critical spring and summer leasing seasons, with rents expected to increase by 4.0% by the end of the third quarter. Growth is then projected to moderate slightly to 3.8% by year-end, in line with historical leasing patterns in the metro.

Submarket Rent & Occupancy

2024 INCOME & EXPENSE ANALYSIS

12-month period ending November 2024

CLICK TO VIEW FORECAST DATA

INCOME

INCOME
Income AssumptionsValue / UnitYear Change (%)
Rental Income / Occupied Unit$1,325.373.6%
Recoverable Expenses / Occupied Unit$54.0711.1%
Other Income / Occupied Unit$65.97-0.1%
Total Income / Occupied Unit$1,445.403.7%
Operating Income
Rental Income$1,231.494.1%
Recoverable Expenses$50.2411.7%
Other Income$61.300.5%
Total Income$1,343.034.2%

EXPENSES

EXPENSES
Operating ExpensesValue / UnitYear Change (%)
Payroll$134.425.0%
Marketing & Advertising$16.7410.3%
Repairs & Maintenance$131.59-0.7%
Administrative$40.197.7%
Management Fees$53.45-0.7%
Utilities$86.39-0.3%
Real Estate & Other Taxes$125.287.3%
Insurance$50.3224.6%
Other Operating Expensees$1.05
Total Operating Expense$639.434.7%
Net Operating Income$703.613.8%
Please note that the income and expense data presented in this section is sourced from trusted third-party data providers and does not reflect the entire market. While we strive for accuracy, our firm does not provide any warranty or guarantee regarding the reliability or precision of this information. We recommend users exercise discretion and professional judgment when interpreting and utilizing this data.
MARKET OUTLOOK

The metro Detroit apartment market is poised for continued stability and growth in 2025, supported by healthy demand for rentals, a manageable development pipeline, and favorable market fundamentals. Rent growth is expected to remain resilient, with a forecasted 4.0% increase by the end of the third quarter before moderating slightly to 3.8% by year-end, aligning with typical seasonal patterns. Occupancy rates are also projected to improve across all market segments, with workforce and mid-tier housing expected to see the most significant gains. The metro’s measured pace of new supply, particularly in contrast to high-growth Sun Belt markets, continues to provide a solid foundation for rental performance in 2025 and beyond.

Looking ahead, Detroit’s apartment market is likely to benefit from its affordability relative to other major metros, attracting renters seeking value-driven housing options. Additionally, steady job growth and demographic trends, particularly in the suburban submarkets, should sustain demand and support further rent appreciation. While modest challenges persist in the high-end segment due to recent supply additions, a slowdown in new deliveries is expected to help stabilize occupancy levels in 2025. Overall, the market is well-positioned for moderate growth, with strong fundamentals underpinning continued investor and developer interest.

Disclaimer: This multifamily forecast incorporates data from reputable third-party sources, including Costar, Yardi Matrix, the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, and ESRI. While we make every effort to ensure accuracy, we cannot guarantee the reliability of the projections provided. Forecasts are inherently subject to change due to evolving market conditions, economic factors, and unforeseen events. We strongly encourage users to conduct independent due diligence and consult with an MMG Advisor before making any investment decisions based on this information.

Featured Research Reports:

To gain further insights into the Detroit market, contact our team:

Alex_Blagojevich

Alex Blagojevich

Executive Managing Director / Co-Founder
Michael-Sullivan

Michael Sullivan

Executive Managing Director / Co-Founder
Brett

Brett Meinzer

Managing Director
Thomas

Thomas Skevington

Senior Advisor
Kyle

Kyle Winston

Senior Advisor
Jake Sullivan_2023

Jake Sullivan

Associate Advisor

Have a question?
Send us a message!