MARKET SNAPSHOT
Bucking the national trend of declining construction levels across most U.S. multifamily markets, development activity in New Orleans has been gradually increasing over the past two years. By the end of 2024, multifamily construction starts rose approximately 42% year-over-year, reaching 560 units. As a result, the total number of units under development stood just shy of 1,000 units in the fourth quarter of 2024, reflecting a 10% increase from the same period in 2023. Despite this uptick, multifamily construction remains a relatively small share of existing inventory and well within the market’s capacity to absorb new supply.
In 2025, approximately 328 units are expected to be completed, marking a decline of roughly 150 units from 2024 deliveries. While development activity continues to rise modestly, the overall volume remains lower than in many peer markets. As such, new supply is unlikely to exert significant downward pressure on occupancy rates or rents in New Orleans in 2025, allowing the market to maintain stability.
New Orleans’s multifamily market demonstrated resilience in 2024, with Q4 average stabilized occupancy remaining unchanged from the same period one year prior. Over the past ten years, annual absorption has averaged 580 units. While 2024 net absorption fell short of this benchmark, the 2025 outlook is more optimistic, with net absorption expected to exceed historical levels. As a result, the stabilized occupancy rate at the market level is projected to rise by 20 basis points, reaching 92.0% by Q4 2025. This increased demand is supported by improving consumer sentiment—one of the key drivers of household formation.
While healthy net absorption should sustain upward pressure on occupancy across most New Orleans submarkets, the metro’s stagnant population growth and below-average employment expansion pose medium-term risks. Population growth remains a concern, as the metro has roughly the same number of residents as it did two decades ago, largely due to outmigration. However, some encouraging trends are emerging. Passenger volumes in New Orleans’ cruise ship sector now exceed pre-pandemic levels—an important development given tourism’s significant role in the local economy.
The New Orleans apartment market experienced steady rent growth in 2024, with Q4 effective rents reaching $1,282, a 2.1% year-over-year increase. Mid- and lower-tier properties led this growth, posting a 2.4% annual gain, while higher-end properties recorded a more modest 1.9% increase—still significantly outperforming the national benchmark of 0.2% for this segment.
Looking ahead, rent growth is expected to accelerate in the second half of 2025 as a constrained supply pipeline and an improving picture for net absorption drives pricing gains across the metro. By Q4 2025, average rents are projected to rise 3.0% to $1,320. With absorption anticipated to outpace new deliveries by a factor of two, luxury properties are positioned for the strongest rent growth at 3.4%, followed by mid-tier and lower-tier segments at 3.0% and 2.8%, respectively. At the submarket level, thirteen of New Orleans’ fourteen submarkets are expected to see annual rent increases, with the small Gentilly submarket (574 units) being the lone exception, where rents are projected to decline. Otherwise, rent growth across most submarkets is expected to remain closely aligned with the metro-wide average of 3.0%.
12-month period ending November 2024
New Orleans’ multifamily market demonstrated resilience in 2024, characterized by steady rent growth and stable occupancy trends. In Q4, effective rents reached $1,282—a 2.1% year-over-year increase—driven primarily by mid- and lower-tier properties, which posted a 2.4% annual gain. Higher-end properties saw a 1.9% increase, which significantly outpaced the national benchmark of 0.2% for this segment.
Looking ahead, net absorption is projected to exceed historical levels in 2025, driving a modest 20-basis-point increase in stabilized occupancy to 92.0% by year-end. Rent growth is expected to accelerate in the second half of the year as a constrained supply pipeline supports pricing gains across the metro. By Q4 2025, average rents are forecasted to rise 3.0% to $1,320, with luxury properties leading at 3.4%, followed by mid- and lower-tier segments at 3.0% and 2.8%, respectively.
While stagnant population growth and below-average employment expansion pose medium-term risks, the local economy is showing signs of resilience. Notably, passenger volumes in New Orleans’ cruise ship sector have surpassed pre-pandemic levels, reinforcing the metro’s tourism-driven economic base. Despite broader economic headwinds, the near-term outlook for New Orleans’ multifamily market remains positive, supported by limited new supply and improving consumer sentiment.
