$1,252 2Q 2024
2.7%
94.4% 2Q 2024
-80 BASIS POINTS
796 [YTD: 1,320]
1,435 [YTD: 2,104]
Cincinnati’s apartment rents climbed 2.7% in the second quarter, placing it ninth among the top 50 rental markets in the U.S.
The absorption of 796 units marks the highest quarterly level of absorption in three years, with no submarkets experiencing net move-outs in the second quarter.
Although the average occupancy rate dipped by 80 basis points year-over-year, it improved by 10 basis points from the first quarter to the second quarter, reversing an eight-quarter trend and signaling a stabilization of occupancies in the metro.
QUARTERLY DEMAND
QUARTERLY COMPLETIONS
Despite a robust surge in rental demand, new deliveries have outpaced absorption for the eighth consecutive quarter ending in 2Q 2024. However, there is a silver lining: the absorption of 796 units marks the highest quarterly level of absorption in three years, with no submarkets experiencing net move-outs. The Northern Kentucky submarket led the way with 234 units absorbed in the second quarter, followed by the Northeast Cincinnati submarket with 144 units absorbed and the outlying East submarket with 142 units absorbed.
The pace of new deliveries is set to slow in 2024. Last year, Cincinnati saw a record 3,600 new units delivered. However, annual deliveries in 2024 are projected to total 2,900 units, marking a 19% decrease from 2023, with an additional 20% decline anticipated in 2025. 1182The second quarter of 2024 saw deliveries concentrated in the Northern Kentucky submarket, reflecting demographic growth in the area. In fact, one in four deliveries over the past 12 months occurred in Northern Kentucky. The Northeast Cincinnati submarket has also been a key area for developers, with 671 units delivered in the same period.
The Cincinnati apartment market showed signs of rebounding in the second quarter of 2024, with positive net absorption rates and a strong overall occupancy rate of 94.4%. Although the average occupancy rate dipped by 80 basis points year-over-year, it improved by 10 basis points quarterly, reversing an eight-quarter trend of declining occupancies. Market stability is evident, with nine out of fourteen submarkets maintaining occupancy rates above 94%. The North Hamilton submarket stands out with an impressive 96.3% occupancy rate, significantly higher than other areas. In contrast, Downtown Cincinnati recorded the lowest occupancy rate at 92.4% among submarkets with an inventory of 10,000 units.
Despite a slowdown in rent growth across the U.S. apartment sector, Cincinnati stood out for its robust performance in the second quarter of 2024. As of the most recent quarter, Cincinnati ranked ninth among the top 50 U.S. apartment markets, with a notable 2.7% year-over-year increase in rent growth. This has elevated the average rent for new leases in the metro to $1,252. While rent increases have been reported across all of Cincinnati’s submarkets, the performance has varied. Among Cincinnati’s key submarkets, North Hamilton has led the way with a notable 4.1% rental rate increase over the past year. On the other hand, Downtown Cincinnati has experienced slower rent growth at 1.7%, partly due to difficulties in absorbing the influx of new units delivered to the submarket over the last year.
Average Monthly Mortgage Payment
Average Monthly Rent
Despite a year-over-year dip in transactions and transaction volume, the first half of 2024 mirrored historical activity in the Cincinnati multifamily market. Transactions decreased by two, and volume dropped by approximately 30% when comparing to the same period as 2023, but the nine transactions totaling $132.2 million this year slightly exceeded the 10-year average of $129.9 million for this period. Additionally, the number of deals matched the average of nine. This resilience is encouraging, especially given the elevated interest rate environment, indicating that investors have a favorable view of Cincinnati’s current and long-term prospects.
*Most Active Buyers and Sellers are based on the sale volume of apartment units.
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
|
Under 35 Years
|
35 to 44 Years
|
45 to 54 Years
|
55 to 64 Years
|
65 to 74 Years
|
75 to 84 Years
|
85 Years & over
|
|---|---|---|---|---|---|---|
|
0.2%
|
-0.3%
|
-1.1%
|
0.2%
|
1.5%
|
0.2%
|
-0.3%
|
Those aged 65-74 represent the fastest-growing renter demographic in Cincinnati, with a 1.5% increase from 2019 to 2022. This trend indicates a rising demand for rental housing near healthcare facilities and lifestyle amenities such as golf courses.
Cincinnati’s rental market demonstrated resilience in the first half of 2024, showcasing a strong foundation despite industry-wide challenges. While the average occupancy rate experienced a modest decline to 94.4%, the market maintained a robust demand profile. This vitality was notably fueled by significant development initiatives concentrated in the Northern and Downtown sectors of the metro area. The metro’s diverse economic landscape, characterized by a thriving tourism industry, robust aerospace manufacturing, and a strong professional sports presence, significantly bolstered rental demand. Cincinnati’s appeal is further enhanced by a robust educational ecosystem, a growing corporate footprint, and a high quality of life. These combined factors position the city as an attractive destination for both residents and investors, fostering a healthy and sustainable rental market.
