MARKET SNAPSHOT
Rising borrowing costs, stricter equity requirements, and a slowdown in rent growth have caused multifamily construction activity in St. Louis to drop to its lowest level in a decade. Currently, approximately 1,550 units are under construction, representing just 1.0% of the existing inventory—about one-third of the national average. This marks a sharp decline from the mid-2022 peak, when construction activity accounted for 5.1% of inventory with over 7,000 apartments underway. Consequently, annual completions fell by more than 50% in 2024 and are expected to continue declining significantly over the next two years, as only around 850 multifamily starts were recorded in the past year—the lowest level in over a decade.
St. Charles County has seen one of the most substantial surges in recent development, solidifying its position as one of Missouri’s fastest-growing regions. Over the past few years, the county’s apartment inventory grew by 25%, compared to just over 10% growth in the broader market. Despite this influx of new development, the submarket’s occupancy rate improved throughout 2024, stabilizing at 95%. Similarly, the Mid County submarket contributed to about a third of the market’s total completions in 2024 and is expected to maintain the largest share of completions in the coming year, while sustaining its current 94% occupancy rate.
These trends indicate that there was sufficient pent-up demand to absorb new supply without adversely affecting occupancy at existing properties. Furthermore, the shrinking construction pipeline is likely to support occupancy increases as new competition diminishes.
Renter demand in St. Louis has increased significantly over the past year, with the strongest gains occurring in the first nine months of 2024. Nearly 3,000 units were absorbed over the past year, representing a 63% increase compared to 2023 and nearing an all-time high. This rising demand has helped the market maintain a stable overall occupancy rate, which ranged between 91.4% and 91.8% throughout the year.
Development activity in St. Louis is projected to reach its lowest level since 2014 this year. If the economy remains stable with low unemployment and sustained demand, the market is expected to see gradual improvements in fundamentals through the end of 2025.
St. Charles County continues to lead the market in demand, with around 800 units absorbed in 2024. While the recent surge in development initially placed downward pressure on occupancy, a slowdown in new construction since early 2024, coupled with increased demand, has boosted the submarket’s occupancy rate to 95%, where it is expected to remain through 2025. Most other submarkets are also forecast to maintain stable occupancy levels in 2025. Meanwhile, submarkets with higher vacancies, including Downtown and North St. Louis, are projected to experience moderate occupancy increases as the year progresses.
St. Louis has consistently outperformed many similarly sized markets in rent growth, frequently ranking within the top 15 among the 50 largest multifamily markets over the past eight quarters. With reduced supply-side pressure and a rebound in the market’s occupancy rate from its low point at the end of 2023, rent growth has continued to strengthen throughout 2024. Over the past year, rents increased by 2.6%, approximately 80 basis points below the market’s 10-year average but significantly above the current national average of 1.0%. The declining use of concessions, coupled with a contracting construction pipeline, is expected to support greater effective rent growth. The St. Louis multifamily market is projected to see annual rent growth accelerate through 2025, reaching 3.6% by year-end.
Submarkets along the I-64 corridor—including West County, Central West End, and St. Charles County—are the region’s highest-rent areas, with average rents exceeding $1,430 per month. These submarkets feature the region’s highest median incomes and the largest concentration of upper-tier properties. However, increased supply has moderated rent growth in some of these areas. For example, the Central West End recorded an average effective rent increase of less than 1% in 2024 due to the impact of new supply. Conversely, St. Charles County has experienced the strongest annual rent growth in the market, with a 3.6% increase in 2024 and a 5% increase forecasted for 2025. The county’s steady household growth has sustained its robust performance and highlights its role as a key growth area within the region.
12-month period ending November 2024
According to MMG’s 2024 Employment Expansion Trend Report, St. Louis is projected to experience steady job growth, with its employment base expected to expand moderately through 2029, underscoring the city’s resilient economic momentum. Additionally, increasing household creation combined with a tightening construction pipeline suggests that the St. Louis multifamily market is poised for continued stabilization in 2025 as supply and demand fundamentals become more balanced.
Reduced construction activity, coupled with elevated renter demand, is expected to support improvements in both rent growth and occupancy in 2025. Development is projected to reach its lowest level since 2014, while the shrinking construction pipeline will create opportunities for existing properties to benefit from decreased competition. Rent growth in St. Louis is already above average—the market has consistently been ranked in the top 15 metro areas for rent increases—and is expected to increase further as the pipeline continues to decline while demand remains robust.
Overall, the market is set for improvement as rental demand will easily outpace supply additions this year. Strong-performing submarkets like St. Charles County and Jefferson County will lead the way, while underperforming areas may see more modest performance. With the economy projected to remain stable, the market outlook for 2025 is one of increasing optimism, with sustained demand, increased occupancy, and positive rent growth anticipated across the region.
