MARKET SNAPSHOT
Last year, Springfield reached a near record high for completions, delivering 746 units—well above the 10-year market average of 427 units. However, supply-side pressures are easing significantly, with under construction inventory down 73% year-over-year and 51% below the market’s historical average. New competition is expected to diminish further in 2025 and beyond, as rising borrowing and construction costs have slowed groundbreakings considerably. As a result, multifamily starts dropped 67% between 2023 and 2024.
With fewer projects breaking ground in the current high-rate environment, Springfield now has only 299 units in the pipeline. This accounts for just 1.1% of the market’s inventory under construction—well below the national average of 3.4%. New completions are also projected to decline 71% in 2025, reducing the risk of oversupply in Springfield compared to other markets. These conditions have supported consistently high occupancy rates and rent growth, underscoring the market’s resilience.
The Springfield market continues to maintain above-average occupancy rates, with stabilized levels consistently holding between 95% to 96% over the past two years. This consistency places Springfield among the top metro areas in the country for occupancy, showcasing its strong demand fundamentals. The stability is especially notable given the substantial number of new deliveries in recent years, which have been quickly absorbed upon completion, highlighting significant pent-up demand.
The market’s affordability has been a major factor driving inbound renter migration and consistent population growth, both of which have supported this high demand. These affordability dynamics, combined with a shrinking construction pipeline, are expected to continue bolstering occupancy over the short term.
Looking ahead, Springfield’s average occupancy rate is projected to remain stable in 2025, hovering around 95%, in line with its historical average. This rate is expected to outperform national and regional benchmarks, as reduced new competition and ongoing population growth create a favorable supply-demand balance. The market’s ability to sustain high occupancy rates while absorbing new inventory underscores its resilience and positions Springfield as a strong, stable option for both renters and multifamily investors.
Rental demand in the Springfield market, as reflected by net absorption, has shown significant growth over the past two years, with annual absorption remaining steady near 485 units in 2023 and 2024. This marks a notable rebound from the cycle low of just 31 units absorbed in 2022. The surge in demand has coincided with a shrinking development pipeline, contributing to accelerated rent growth. Over the past year, effective rents in Springfield increased by 4.3%, far outpacing the national average of 1.1%.
Springfield’s affordability is a key driver of its strong rental performance, with average rents at $969—comparable to other Midwest markets like Wichita and Evansville. Its relatively low cost of living compared to regional peer markets has bolstered its appeal to renters and positioned Springfield as a standout in rent growth over the past five years. This affordability, combined with robust renter demand and a decline in new competition, is expected to support sustained rent gains in 2025.
Looking ahead, annual rent growth in Springfield is forecast to remain solid, fluctuating within 30 basis points of 4.0%, which is above the market’s historical average of around 3.5%. With strong fundamentals, including a growing population, affordable rents, and reduced supply pressures, Springfield is well-positioned to maintain steady rent growth and continue attracting renters in the coming years. These factors also make the market increasingly attractive to investors seeking stability and long-term growth opportunities.
The Springfield multifamily market is well-positioned to continue outperforming in 2025, driven by a sharp decline in new supply, strong renter demand, and consistent population growth. Development activity has slowed considerably, with under-construction inventory dropping 73% year-over-year to just 299 units—the lowest level since 2019—while deliveries are projected to decrease by a similar margin to 218 units in 2025. This significant reduction in supply, coupled with a slowdown in multifamily starts due to rising construction and borrowing costs, is expected to ease competitive pressures and bolster the market’s occupancy and rent growth.
Springfield continues to experience robust rental demand, with net absorption projected to rise further in the near term. This sustained demand, combined with limited new competition, has supported above-average occupancy rates, which have remained stable near 95% over the past two years. These rates are expected to stay consistent through 2025, outperforming both national and regional benchmarks. Additionally, Springfield’s affordability is likely to continue attracting renters, further driving demand. Rent growth is forecast to remain elevated at around 4% annually, significantly outpacing the national average.
Bolstered by a growing population and a strong, diverse economy anchored by industries such as healthcare, logistics, and advanced manufacturing, Springfield is positioned for sustainable multifamily growth. These factors, along with its affordability and minimal oversupply risk, make the market increasingly appealing to both renters and investors seeking stability and long-term returns.
