MARKET SNAPSHOT
In 2024, multifamily starts experienced a sharp decline compared to 2023. With approximately 5,000 starts initiated in 2024, the figure is significantly below the 10-year historical average of roughly 9,400. This slowdown indicates a notable reduction in the pace of new supply expected to come online in 2026 and 2027. However, developers are still focused on completing a historically elevated level of units currently under construction. As of December 31, 2024, 15,655 units were under construction across the Orlando market, slightly exceeding the 10-year average. The Lake Nona submarket is projected to lead its peers in 2025, with 2,835 units scheduled for delivery, accounting for approximately 23% of the total construction pipeline. Among the remaining 12 submarkets, five—led by South Orlando—are each expected to contribute 11% to 13% of the pipeline.
Overall, new unit deliveries in 2025 are projected to total 11,481, representing an 11.3% decline compared to the previous year. However, the steep drop in starts in 2024 suggests a material slowdown in new deliveries by 2026, which could create upward pressure on rents as demand outpaces supply, a dynamic not seen in recent years.
Orlando’s development pipeline remains one of the most active in the nation, with approximately 13,000 new units delivered in 2024. However, renter demand was robust during the year, with about 12,000 units absorbed—well above the long-term average of 8,781 units. Despite the significant influx of new supply, strong net absorption in 2024 limited downward pressure on occupancy rates, which declined by only 60 basis points over the trailing 12 months to close the year at 92.8%.
Looking ahead, absorption is expected to moderate slightly in 2025, but stabilized occupancy is projected to edge up to 92.9% by year-end as deliveries taper and rental demand aligns with new supply. Persistent demand in the I-Drive and Southwest Orlando submarkets will continue to anchor the region, supported by proximity to major employment hubs and desirable retail and lifestyle amenities.
Orlando’s combination of warm weather and a business-friendly environment is expected to attract a steady influx of northern transplants, sustaining multifamily demand through the remainder of the decade. This dynamic reinforces a positive long-term outlook for the metro’s multifamily sector while providing strong near-term stability.
Year-over-year rent growth in Orlando continued to decelerate entering the final quarter of 2024, with a modest annual decline of 0.8%, marking the seventh consecutive quarter of decreases. However, quarterly trends show improvement, with rents rising by 80 basis points from the third quarter to the fourth quarter. Looking ahead to 2025, the outlook for rent growth is more optimistic. Net absorption of multifamily units in Orlando outperformed initial forecasts in 2024, and rental demand is expected to sustain this momentum into 2025. As the construction pipeline gradually tapers through the year, the supply-demand dynamic is anticipated to stabilize further.
This equilibrium is projected to drive positive annual rent growth starting in the spring leasing season, marking the first annual increase since Q1 2023. Rents are forecasted to rise by 0.9% year-over-year in the second quarter, accelerating to approximately 2.4% by year-end. At the submarket level, rent growth is expected to vary widely, ranging from 1.0% in Osceola County to a robust 5.0% in the East Outlying submarket. These gains highlight improving market conditions following two challenging years, positioning the market for stronger growth in 2026 and 2027.
12-month period ending November 2024
The 2025 outlook for Orlando’s multifamily market reflects stabilization, as positive rent growth and modestly rising occupancy levels at stabilized properties reverse the declining fundamentals of the past two years. This turnaround is fueled by a tapering construction pipeline and Orlando’s enduring economic and lifestyle appeal, strengthened by the growing presence of industry leaders across Central Florida. The region’s diverse economy features a rapidly expanding base of tech and financial firms, a well-established defense sector, and its world-renowned theme parks. In fact, Orlando ranks among the fastest-growing job markets in the U.S. (Top 10) and is projected to grow its employment base by an additional 7.2% through 2029, positioning it among the top three metros for employment growth.
Additionally, Orlando’s deep talent pool—enhanced by institutions such as the University of Central Florida and the steady influx of highly educated professionals—cements the market’s status as a premier destination for business expansion and relocation. These factors underpin sustained long-term demand for multifamily housing while strengthening the market’s appeal to investors and developers alike.
