average rent
average occupancy rate
ytd sales volume
YoY rent change
yoy occupancy change
individual transactions
QUARTERLY DEMAND
YTD: 184,906
QUARTERLY COMPLETIONS
YTD: 320,632
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| Market | Existing Units | Annual New Supply | New Supply to Existing Units Ratio | Annual Rent Change |
|---|---|---|---|---|
| Huntsville, AL | 40,903 | 5,822 | 14.2% | -1.0% |
| Sioux Falls, SD | 26,621 | 2,351 | 8.8% | 2.3% |
| Lakeland-Winter Haven, FL | 31,128 | 2,221 | 7.1% | -0.3% |
| Provo-Orem, UT | 26,807 | 1,822 | 6.8% | -1.8% |
| Pensacola-Ferry Pass-Brent, FL | 26,620 | 1,784 | 6.7% | -2.2% |
| Salt Lake City/Ogden/Clearfield, UT | 127,407 | 7,635 | 6.0% | -2.5% |
| Nashville-Davidson--Murfreesboro--Franklin, TN | 182,174 | 10,635 | 5.8% | -1.9% |
| Myrtle Beach-Conway-North Myrtle Beach, SC-NC | 47,404 | 2,687 | 5.7% | -3.1% |
| Austin-Round Rock, TX | 298,266 | 16,481 | 5.5% | -4.8% |
| Charlotte-Concord-Gastonia, NC-SC | 223,739 | 12,346 | 5.5% | -1.3% |
| Colorado Springs, CO | 55,631 | 3,060 | 5.5% | -3.3% |
| Port St. Lucie/Sebastian/Vero Beach, FL | 28,982 | 1,561 | 5.4% | 0.3% |
| Raleigh/Durham, NC | 188,129 | 9,855 | 5.2% | -2.8% |
| Jacksonville, FL | 136,753 | 7,117 | 5.2% | -3.6% |
| Boise City, ID | 31,936 | 1,612 | 5.0% | -6.3% |
| North Port-Sarasota-Bradenton, FL | 66,086 | 3,271 | 4.9% | -3.0% |
| Wilmington, NC | 28,012 | 1,272 | 4.5% | -2.5% |
| Palm Bay-Melbourne-Titusville, FL | 40,230 | 1,703 | 4.2% | -1.2% |
| Augusta-Richmond County, GA-SC | 31,976 | 1,310 | 4.1% | -0.9% |
| Phoenix-Mesa-Scottsdale, AZ | 399,847 | 16,373 | 4.1% | -4.8% |
| Charleston-North Charleston, SC | 72,484 | 2,895 | 4.0% | 3.6% |
| Greenville/Spartanburg, SC | 73,930 | 2,800 | 3.8% | 1.8% |
| Madison, WI | 77,574 | 2,792 | 3.6% | 9.4% |
| Fort Worth-Arlington, TX | 231,933 | 8,329 | 3.6% | -0.5% |
| Orlando-Kissimmee-Sanford, FL | 265,930 | 9,532 | 3.6% | -2.6% |
| Savannah, GA | 32,953 | 1,147 | 3.5% | 2.0% |
| Reno, NV | 50,115 | 1,703 | 3.4% | -2.6% |
| Atlanta-Sandy Springs-Roswell, GA | 560,481 | 18,708 | 3.3% | -3.6% |
| Omaha-Council Bluffs, NE-IA | 88,696 | 2,880 | 3.2% | 5.8% |
| Chattanooga, TN-GA | 33,581 | 1,068 | 3.2% | 1.1% |
| Deltona-Daytona Beach-Ormond Beach, FL | 38,384 | 1,168 | 3.0% | -1.1% |
| Denver-Aurora-Lakewood, CO | 331,167 | 9,869 | 3.0% | 0.7% |
| Richmond, VA | 113,866 | 3,315 | 2.9% | 0.3% |
| Fayetteville-Springdale-Rogers, AR-MO | 40,572 | 1,161 | 2.9% | 4.5% |
| Harrisburg-Carlisle, PA | 36,448 | 1,028 | 2.8% | 2.2% |
| Cape Coral-Fort Myers, FL | 53,425 | 1,506 | 2.8% | -0.7% |
| Macon/Warner Robins, GA | 25,948 | 723 | 2.8% | 1.0% |
| Columbus, OH | 202,450 | 5,624 | 2.8% | 2.7% |
| Naples-Immokalee-Marco Island, FL | 31,855 | 837 | 2.6% | 1.1% |
| Dallas-Plano-Irving, TX | 683,354 | 17,057 | 2.5% | -0.5% |
| Kansas City, MO-KS | 184,799 | 4,525 | 2.4% | 3.3% |
| Lincoln, NE | 34,205 | 835 | 2.4% | 6.0% |
| San Antonio-New Braunfels, TX | 225,109 | 5,432 | 2.4% | -2.3% |
| Tacoma-Lakewood, WA | 63,538 | 1,529 | 2.4% | -1.6% |
| Tampa-St. Petersburg-Clearwater, FL | 278,325 | 6,641 | 2.4% | -1.3% |
| Spokane-Spokane Valley, WA | 43,731 | 1,040 | 2.4% | -1.3% |
| Minneapolis-St. Paul-Bloomington, MN-WI | 324,283 | 7,696 | 2.4% | 1.0% |
| Houston-The Woodlands-Sugar Land, TX | 753,816 | 17,131 | 2.3% | 0.6% |
| Bridgeport-Stamford-Norwalk, CT | 60,218 | 1,345 | 2.2% | 1.7% |
| Miami-Miami Beach-Kendall, FL | 324,529 | 6,953 | 2.1% | 2.4% |
| Eugene, OR | 25,934 | 550 | 2.1% | -2.0% |
| Washington-Arlington-Alexandria, DC-VA-MD-WV | 681,684 | 14,455 | 2.1% | 1.7% |
| West Palm Beach-Boca Raton-Delray Beach, FL | 126,212 | 2,625 | 2.1% | -0.3% |
| Fort Wayne, IN | 28,496 | 583 | 2.0% | 0.2% |
| Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | 410,695 | 8,367 | 2.0% | 1.8% |
| Stockton-Lodi, CA | 31,211 | 634 | 2.0% | -1.2% |
| Indianapolis-Carmel-Anderson, IN | 172,973 | 3,465 | 2.0% | 3.2% |
| Fargo, ND-MN | 37,444 | 748 | 2.0% | 5.4% |
| Fort Lauderdale-Pompano Beach-Deerfield Beach, FL | 202,992 | 3,995 | 2.0% | 0.4% |
| Salisbury, MD-DE | 25,015 | 488 | 2.0% | 3.4% |
| Greensboro/Winston-Salem, NC | 111,758 | 2,147 | 1.9% | 0.2% |
| Newark-Jersey City, NJ-PA | 556,909 | 10,588 | 1.9% | 4.9% |
| Mobile/Daphne, AL | 43,263 | 821 | 1.9% | 3.9% |
| Asheville, NC | 25,474 | 473 | 1.9% | 1.4% |
| Des Moines-West Des Moines, IA | 55,287 | 1,024 | 1.9% | 4.4% |
| Portland-South Portland, ME | 28,665 | 529 | 1.8% | 4.2% |
| Sacramento--Roseville--Arden-Arcade, CA | 157,500 | 2,811 | 1.8% | -1.8% |
| Seattle-Bellevue-Everett, WA | 373,254 | 6,609 | 1.8% | -1.0% |
| Santa Rosa, CA | 26,588 | 469 | 1.8% | -0.2% |
| Boston-Cambridge-Newton, MA-NH | 422,824 | 7,272 | 1.7% | 3.2% |
| Milwaukee-Waukesha-West Allis, WI | 161,699 | 2,668 | 1.6% | 3.4% |
| Cincinnati, OH-KY-IN | 167,630 | 2,760 | 1.6% | 4.5% |
| Portland-Vancouver-Hillsboro, OR-WA | 234,480 | 3,810 | 1.6% | -2.4% |
| McAllen/Brownsville, TX | 37,491 | 587 | 1.6% | 2.4% |
| Oakland-Hayward-Berkeley, CA | 222,020 | 3,470 | 1.6% | -2.2% |
| Trenton, NJ | 29,330 | 458 | 1.6% | 6.0% |
| Las Vegas-Henderson-Paradise, NV | 228,396 | 3,566 | 1.6% | -4.3% |
| St. Louis, MO-IL | 170,360 | 2,628 | 1.5% | 3.1% |
| Lubbock, TX | 25,501 | 385 | 1.5% | 2.5% |
| Midland/Odessa, TX | 27,492 | 411 | 1.5% | 15.6% |
| Knoxville, TN | 53,810 | 788 | 1.5% | 4.5% |
| Boulder, CO | 31,072 | 454 | 1.5% | 1.5% |
| Louisville/Jefferson County, KY-IN | 97,027 | 1,413 | 1.5% | 3.0% |
| Salem, OR | 26,052 | 370 | 1.4% | 1.3% |
| Fort Collins, CO | 23,199 | 317 | 1.4% | 2.0% |
| Hartford-West Hartford-East Hartford, CT | 90,555 | 1,233 | 1.4% | 4.3% |
| Springfield, MO | 24,731 | 336 | 1.4% | 2.8% |
| Birmingham-Hoover, AL | 80,019 | 1,073 | 1.3% | -0.8% |
| Tallahassee, FL | 31,787 | 426 | 1.3% | 0.9% |
| Wichita, KS | 36,582 | 483 | 1.3% | 3.1% |
| San Jose-Sunnyvale-Santa Clara, CA | 184,986 | 2,438 | 1.3% | -1.8% |
| Baltimore-Columbia-Towson, MD | 239,093 | 3,123 | 1.3% | 0.8% |
| Allentown-Bethlehem-Easton, PA-NJ | 44,341 | 575 | 1.3% | 2.4% |
| Albany-Schenectady-Troy, NY | 66,442 | 861 | 1.3% | 5.0% |
| Columbus, GA-AL | 24,738 | 319 | 1.3% | 4.9% |
| Dayton, OH | 57,218 | 737 | 1.3% | 3.6% |
| Vallejo/Fairfield/Napa, CA | 29,348 | 378 | 1.3% | -3.1% |
| Corpus Christi, TX | 36,761 | 466 | 1.3% | 0.6% |
| Oxnard-Thousand Oaks-Ventura, CA | 43,886 | 555 | 1.3% | 1.1% |
| Manchester/Nashua/Concord, NH | 37,838 | 428 | 1.1% | 3.3% |
| Gainesville, FL | 29,908 | 320 | 1.1% | 2.6% |
| Fayetteville, NC | 25,452 | 262 | 1.0% | 1.2% |
| Grand Rapids/Muskegon/Holland, MI | 67,996 | 685 | 1.0% | 3.2% |
| College Station-Bryan, TX | 26,518 | 264 | 1.0% | 6.4% |
| Chicago-Naperville-Elgin, IL-IN-WI | 755,834 | 7,384 | 1.0% | 3.5% |
| New Haven-Milford, CT | 61,310 | 590 | 1.0% | 3.8% |
| Memphis, TN-MS-AR | 109,857 | 1,054 | 1.0% | 0.6% |
| Anaheim-Santa Ana-Irvine, CA | 270,186 | 2,494 | 0.9% | 1.2% |
| Little Rock-North Little Rock-Conway, AR | 56,625 | 519 | 0.9% | 3.0% |
| Akron, OH | 44,931 | 410 | 0.9% | 3.3% |
| Los Angeles-Long Beach-Glendale, CA | 1,148,116 | 10,332 | 0.9% | -0.6% |
| Virginia Beach-Norfolk-Newport News, VA-NC | 144,227 | 1,266 | 0.9% | 2.7% |
| Pittsburgh, PA | 148,761 | 1,246 | 0.8% | 1.5% |
| Cleveland-Elyria, OH | 171,648 | 1,328 | 0.8% | 2.9% |
| San Diego-Carlsbad, CA | 322,088 | 2,436 | 0.8% | 1.7% |
| Kalamazoo/Battle Creek, MI | 34,534 | 258 | 0.7% | -1.6% |
| Oklahoma City, OK | 101,288 | 736 | 0.7% | 1.3% |
| Crestview-Fort Walton Beach-Destin, FL | 23,971 | 170 | 0.7% | -4.5% |
| Lexington-Fayette, KY | 47,209 | 324 | 0.7% | 4.5% |
| San Francisco-Redwood City-South San Francisco, CA | 251,915 | 1,724 | 0.7% | -2.1% |
| Riverside-San Bernardino-Ontario, CA | 195,663 | 1,327 | 0.7% | -1.0% |
| Salinas, CA | 24,360 | 165 | 0.7% | 1.8% |
| Worcester, MA-CT | 54,079 | 353 | 0.7% | 0.4% |
| El Paso, TX | 55,721 | 359 | 0.6% | 3.9% |
| New York-White Plains, NY | 1,931,704 | 12,168 | 0.6% | 2.3% |
| Detroit-Warren-Dearborn, MI | 279,451 | 1,728 | 0.6% | 0.0% |
| Baton Rouge, LA | 49,746 | 302 | 0.6% | -0.4% |
| Tucson, AZ | 83,936 | 467 | 0.6% | 1.1% |
| Albuquerque, NM | 56,672 | 307 | 0.5% | 2.0% |
| Buffalo-Cheektowaga-Niagara Falls, NY | 65,369 | 353 | 0.5% | 4.1% |
| New Orleans-Metairie, LA | 82,651 | 341 | 0.4% | 1.3% |
| Columbia, SC | 50,448 | 206 | 0.4% | 2.5% |
| Syracuse, NY | 42,921 | 167 | 0.4% | 4.6% |
| Nassau County-Suffolk County, NY | 80,422 | 282 | 0.4% | 0.5% |
| Rochester, NY | 68,935 | 233 | 0.3% | 5.2% |
| Lansing-East Lansing, MI | 41,149 | 122 | 0.3% | 2.8% |
| Tulsa, OK | 70,564 | 198 | 0.3% | 3.2% |
| Providence-Warwick, RI-MA | 107,756 | 197 | 0.2% | 4.8% |
| Ann Arbor, MI | 38,464 | 30 | 0.1% | 2.2% |
| Urban Honolulu, HI | 82,669 | 51 | 0.1% | -0.4% |
| Toledo, OH | 45,860 | 21 | 0.0% | 2.5% |
| Flint, MI | 25,676 | 0 | 0.0% | 0.8% |
| Bakersfield, CA | 26,154 | 0 | 0.0% | 1.8% |
| Fresno, CA | 56,600 | 0 | 0.0% | 2.2% |
| Shreveport-Bossier City, LA | 25,954 | 0 | 0.0% | 2.5% |
| Santa Maria-Santa Barbara, CA | 28,930 | 0 | 0.0% | 2.9% |
| Youngstown-Warren-Boardman, OH-PA | 25,413 | 0 | 0.0% | 4.1% |
| Jackson, MS | 33,001 | 0 | 0.0% | 4.5% |
| Champaign-Urbana, IL | 27,190 | 0 | 0.0% | 6.6% |
| Springfield, MA | 46,322 | 0 | 0.0% | 9.9% |
| Average/Total | 21,130,566 | 417,535 | 2.1% | 0.4% |
Average Monthly Mortgage Payment
Average Monthly Rent
| * The Average mortgage payment is based off a median home sales price of $430,000 as reported by the National of Realtors as of August 2023. |
Surveying the multifamily landscape on a national scale reveals that the influx of new apartment units is pressuring rent growth; evidenced by the modest 0.4% annual increase in rents during the third quarter. It’s a straightforward case of supply-demand imbalance, especially evident in former rent growth champions like Austin, Atlanta, and Phoenix, now grappling with significant rent reductions as deliveries ramp up. Although the third quarter’s rent growth figure diverged well below the usual seasonal growth trajectory figure, overall demand seems to be normalizing across the majority of the nation. This recalibration follows a brief downturn in the latter half of 2022 when net demand dipped into negative territory. Despite the rental rate reductions year-on-year in markets like Austin, Atlanta, and Phoenix, these areas still showcased robust net absorption in the third quarter, aligning closely with their historical seasonal benchmarks.
It is clear operators are prioritizing maintaining occupancy levels over immediate rent hikes, as supply is increasingly exceeding demand. Add the costs of tenant turnover growing amid tangible financial pressures, tenant retention has emerged as critical strategy in the current moment. This is a marked departure from as recent as early 2022 when rental options were scarce, especially for the mid- to upper-income renter demographic. This scarcity empowered operators to set record-high rents. Yet, the present scenario provides prospective tenants with many more options, shifting the advantage to their side. This changing dynamic underscores the need for operators to adjust their strategies, bearing in mind that vacancies result in no revenue.
Regional summaries highlight this supply impact remarkably well. The lowest supply regions, specifically the Midwest and Northeast, are still maintaining rent growth in line with historic norms. In fact, peering at the top 15 markets for rent growth among the nation’s 50 largest apartment markets reveals 13 markets are located in the Midwest or Northeast, emphasizing the impact supply is having on the apartment market.
| Market | Average Occupancy | Annual Occupancy Change | Average Monthly Rent | Annual Rent Change |
|---|---|---|---|---|
| Newark-Jersey City, NJ-PA | 96.6% | -0.8% | $2,643 | 4.9% |
| Cincinnati, OH-KY-IN | 95.5% | -0.8% | $1,364 | 4.5% |
| Chicago-Naperville-Elgin, IL-IN-WI | 95.3% | -0.4% | $1,964 | 3.5% |
| Milwaukee-Waukesha-West Allis, WI | 96.8% | -0.5% | $1,527 | 3.4% |
| Kansas City, MO-KS | 94.9% | -1.1% | $1,302 | 3.3% |
| Boston-Cambridge-Newton, MA-NH | 95.6% | -0.8% | $2,939 | 3.2% |
| Indianapolis-Carmel-Anderson, IN | 93.9% | -1.8% | $1,261 | 3.2% |
| St. Louis, MO-IL | 94.4% | -1.5% | $1,277 | 3.1% |
| Cleveland-Elyria, OH | 94.8% | -1.5% | $1,231 | 2.9% |
| Virginia Beach-Norfolk-Newport News, VA-NC | 95.3% | -1.1% | $1,497 | 2.7% |
| Columbus, OH | 94.8% | -1.1% | $1,321 | 2.7% |
| Miami-Miami Beach-Kendall, FL | 95.3% | -1.3% | $2,569 | 2.4% |
| New York-White Plains, NY | 96.9% | -0.9% | $4,476 | 2.3% |
| Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | 95.7% | -1.0% | $1,804 | 1.8% |
| Washington-Arlington-Alexandria, DC-VA-MD-WV | 95.0% | -0.7% | $2,109 | 1.7% |
| San Diego-Carlsbad, CA | 96.3% | -1.1% | $2,858 | 1.7% |
| Pittsburgh, PA | 94.6% | -1.3% | $1,512 | 1.5% |
| Anaheim-Santa Ana-Irvine, CA | 96.5% | -0.7% | $2,810 | 1.2% |
| Minneapolis-St. Paul-Bloomington, MN-WI | 94.8% | -0.5% | $1,536 | 1.0% |
| Baltimore-Columbia-Towson, MD | 94.2% | -1.7% | $1,682 | 0.8% |
| Denver-Aurora-Lakewood, CO | 94.2% | -0.9% | $1,924 | 0.7% |
| Houston-The Woodlands-Sugar Land, TX | 93.0% | -0.8% | $1,367 | 0.6% |
| Memphis, TN-MS-AR | 92.2% | -2.5% | $1,219 | 0.6% |
| Fort Lauderdale-Pompano Beach-Deerfield Beach, FL | 94.5% | -0.8% | $2,449 | 0.4% |
| Richmond, VA | 94.2% | -1.5% | $1,516 | 0.3% |
| Greensboro/Winston-Salem, NC | 92.9% | -2.0% | $1,220 | 0.2% |
| Detroit-Warren-Dearborn, MI | 94.5% | -1.9% | $1,289 | 0.0% |
| West Palm Beach-Boca Raton-Delray Beach, FL | 94.2% | -0.5% | $2,427 | -0.3% |
| Fort Worth-Arlington, TX | 93.0% | -1.5% | $1,421 | -0.5% |
| Dallas-Plano-Irving, TX | 93.5% | -1.6% | $1,594 | -0.5% |
| Los Angeles-Long Beach-Glendale, CA | 95.3% | -1.2% | $2,813 | -0.6% |
| Riverside-San Bernardino-Ontario, CA | 94.7% | -1.8% | $2,237 | -1.0% |
| Seattle-Bellevue-Everett, WA | 94.8% | -0.8% | $2,222 | -1.0% |
| Charlotte-Concord-Gastonia, NC-SC | 93.7% | -1.3% | $1,602 | -1.3% |
| Tampa-St. Petersburg-Clearwater, FL | 93.8% | -1.2% | $1,853 | -1.3% |
| Sacramento--Roseville--Arden-Arcade, CA | 94.4% | -1.4% | $1,974 | -1.8% |
| San Jose-Sunnyvale-Santa Clara, CA | 95.7% | -0.6% | $3,093 | -1.8% |
| Nashville-Davidson--Murfreesboro--Franklin, TN | 94.4% | -1.3% | $1,645 | -1.9% |
| San Francisco-Redwood City-South San Francisco, CA | 95.3% | -0.3% | $3,215 | -2.1% |
| Oakland-Hayward-Berkeley, CA | 94.6% | -1.2% | $2,618 | -2.2% |
| San Antonio-New Braunfels, TX | 91.9% | -2.4% | $1,269 | -2.3% |
| Portland-Vancouver-Hillsboro, OR-WA | 94.3% | -1.5% | $1,748 | -2.4% |
| Salt Lake City/Ogden/Clearfield, UT | 93.8% | -1.6% | $1,593 | -2.5% |
| Orlando-Kissimmee-Sanford, FL | 94.1% | -1.6% | $1,802 | -2.6% |
| Raleigh/Durham, NC | 93.6% | -1.4% | $1,563 | -2.8% |
| Atlanta-Sandy Springs-Roswell, GA | 92.6% | -1.9% | $1,671 | -3.6% |
| Jacksonville, FL | 92.7% | -1.7% | $1,508 | -3.6% |
| Las Vegas-Henderson-Paradise, NV | 92.8% | -1.5% | $1,462 | -4.3% |
| Austin-Round Rock, TX | 93.3% | -1.6% | $1,650 | -4.8% |
| Phoenix-Mesa-Scottsdale, AZ | 92.8% | -1.4% | $1,606 | -4.8% |
| Region | Average Rental Rate | Rent Change | Occupancy | Occupancy Change |
|---|---|---|---|---|
| West | $2,238 | -1.0% | 94.8% | -1.1% |
| Midwest | $1,396 | 2.9% | 95.1% | -1.1% |
| South | $1,612 | -0.4% | 93.7% | -1.4% |
| Northeast | $2,209 | 3.3% | 96.0% | -0.9% |
West: AK, AZ, CA, CO, HI, ID, MT, NM, NV, OR, UT, WA, WY
Northeast: CT, MA, ME, NH, NJ, NY, PA, RI, VT
Midwest: IA, IL, IN, KS, MI, MN, MO, ND, NE, OH, SD, WI
South: AL, AR, DC, DE, FL, GA, KY, LA, MD, MS, NC, OK, SC, TN, TX, VA, WV
The peak in apartment deal volume was reached a year ago, in the third quarter of 2022, with August being the pinnacle. A persistent downturn in deal volume has followed since then. Preliminary data from Real Capital Analytics indicate a roughly 61% reduction in deal volume through the third quarter of 2023 compared to the corresponding period in the previous year. A notable hindrance to deal activity has been the negative leverage encountered in new acquisitions. The impact on the sale of individual assets has varied little between property types this year with the mid/high-rise segment recording a 60% year-over-year (YOY) decline, contrasted by a marginally sharper 63% drop for garden style apartments. These broad-based declines emphasize the challenges the investors are facing with market liquidity.
The investment assumptions made in late 2021 and early 2022 were disrupted as inflation propelled interest rates and financing costs higher. The discord between cap rates and mortgage rates persists, and until this dynamic normalizes to a point where leverage augments return, a near-term resurgence in deal volume remains a dubious prospect.
*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 +
| August 2023 MoM Change (%) | Annual Change (%) | |
|---|---|---|
| All items | 0.6 | 3.7 |
| Food | 0.2 | 4.3 |
| Energy | 5.6 | -3.6 |
| Energy commodities | 10.5 | -4.2 |
| Gasoline (all types) | 10.6 | -3.3 |
| Energy services | 0.2 | -2.7 |
| Electricity | 0.2 | 2.1 |
| All items less food and energy | 0.3 | 4.3 |
| Commodities less food and energy commodities | -0.1 | 0.2 |
| New vehicles | 0.3 | 2.9 |
| Used cars and trucks | -1.2 | -6.6 |
| Apparel | 0.2 | 3.1 |
| Services less energy services | 0.4 | 5.9 |
| Shelter | 0.3 | 7.3 |
| Medical care services | 0.1 | -2.1 |
The August report from the U.S. Bureau of Labor Statistics described a gradual uptick in inflation, with the Consumer Price Index for All Urban Consumers (CPI-U) marking a 0.6% monthly ascent on a seasonally adjusted basis, a discernible rise from the 0.2% observed in July. Annually, the “all items” index increased 3.7% prior to seasonal adjustment. A substantial portion of this monthly increase was attributed to the gasoline index, which accounted for over half of the “all items” increment. Another noteworthy contributor was the enduring rise in the shelter index, marking its 40th consecutive monthly growth. While the BLS data recorded an upward trajectory in shelter inflation, this was in stark contrast to observations from private data companies, which recorded flat or even declining rents in many markets. This discrepancy is often attributed to a lag in the BLS’ methodologies in capturing real-time market dynamics. The energy index soared by 5.6% in August with all major energy components on an upward trajectory. Meanwhile, the food index kept a steady pace with a 0.2% increase, mirroring July’s figure.
The overarching narrative was one of a persisting inflationary trend, albeit with some indices portraying a more moderated pace. The annual comparison, revealing a 3.7% all items increase for the year ending August as opposed to the 3.2% for the year ending July, underscored a slightly intensified inflationary environment.
In September 2023, the U.S. job market significantly outperformed expectations, adding 336,000 jobs, doubling the Dow Jones estimate of 170,000. The unemployment rate steadied at 3.8%, slightly above the anticipated 3.7%. This robust job growth, spearheaded by the leisure and hospitality sector with 96,000 new jobs, underscores the U.S. economy’s resilience amid rising interest rates and political challenges. Government and health care sectors followed, adding 73,000 and 41,000 jobs respectively, while the motion picture industry shed 5,000 jobs due to ongoing labor disputes.
Despite the encouraging employment figures, wage growth was muted with a 0.2% rise for the month, and a 4.2% increase year-over-year, falling short of the projected 0.3% and 4.3%. This modest wage ascent amidst a vibrant job market hints at the likelihood of the Federal Reserve sustaining high interest rates to address inflation.
September Annual Jobs Created
September 2023 Employment growth
September 2023 Unemployment Rate
| Top 50 Largest Metros | August 2023 Unemployment Rate (%) | Annual Change (Percentage Points) |
|---|---|---|
| Baltimore-Columbia-Towson, MD Metropolitan Statistical Area | 1.8 | -1.7 |
| Pittsburgh, PA Metropolitan Statistical Area | 4.3 | -1 |
| Boston-Cambridge-Nashua, MA-NH Metropolitan NECTA | 2.7 | -0.9 |
| Providence-Warwick, RI-MA Metropolitan NECTA | 3.2 | -0.9 |
| Cleveland-Elyria, OH Metropolitan Statistical Area | 3.7 | -0.8 |
| Hartford-West Hartford-East Hartford, CT Metropolitan NECTA | 3.5 | -0.7 |
| Portland-Vancouver-Hillsboro, OR-WA Metropolitan Statistical Area | 3.7 | -0.7 |
| Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical Area | 2.6 | -0.7 |
| Charlotte-Concord-Gastonia, NC-SC Metropolitan Statistical Area | 3.3 | -0.6 |
| Birmingham-Hoover, AL Metropolitan Statistical Area | 2.3 | -0.4 |
| Miami-Fort Lauderdale-West Palm Beach, FL Metropolitan Statistical Area | 2.6 | -0.4 |
| New Orleans-Metairie, LA Metropolitan Statistical Area | 3.6 | -0.4 |
| Raleigh, NC Metropolitan Statistical Area | 3.2 | -0.4 |
| Virginia Beach-Norfolk-Newport News, VA-NC Metropolitan Statistical Area | 3.3 | -0.4 |
| Columbus, OH Metropolitan Statistical Area | 3.4 | -0.3 |
| Richmond, VA Metropolitan Statistical Area | 3.2 | -0.3 |
| Buffalo-Cheektowaga-Niagara Falls, NY Metropolitan Statistical Area | 3.8 | -0.2 |
| Cincinnati, OH-KY-IN Metropolitan Statistical Area | 3.5 | -0.2 |
| Memphis, TN-MS-AR Metropolitan Statistical Area | 4.4 | -0.2 |
| Nashville-Davidson--Murfreesboro--Franklin, TN Metropolitan Statistical Area | 2.7 | -0.2 |
| Rochester, NY Metropolitan Statistical Area | 3.5 | -0.2 |
| Las Vegas-Henderson-Paradise, NV Metropolitan Statistical Area | 6.1 | -0.1 |
| Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metropolitan Statistical Area | 4.5 | -0.1 |
| Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area | 3.8 | 0 |
| Chicago-Naperville-Elgin, IL-IN-WI Metropolitan Statistical Area | 5.1 | 0.1 |
| Oklahoma City, OK Metropolitan Statistical Area | 3.2 | 0.1 |
| Orlando-Kissimmee-Sanford, FL Metropolitan Statistical Area | 3.1 | 0.1 |
| Phoenix-Mesa-Scottsdale, AZ Metropolitan Statistical Area | 4 | 0.1 |
| Jacksonville, FL Metropolitan Statistical Area | 3.2 | 0.2 |
| Tampa-St. Petersburg-Clearwater, FL Metropolitan Statistical Area | 3.2 | 0.3 |
| Detroit-Warren-Dearborn, MI Metropolitan Statistical Area | 4.1 | 0.4 |
| Kansas City, MO-KS Metropolitan Statistical Area | 3.4 | 0.4 |
| Atlanta-Sandy Springs-Roswell, GA Metropolitan Statistical Area | 3.7 | 0.5 |
| Indianapolis-Carmel-Anderson, IN Metropolitan Statistical Area | 3.4 | 0.5 |
| Louisville/Jefferson County, KY-IN Metropolitan Statistical Area | 3.8 | 0.5 |
| Milwaukee-Waukesha-West Allis, WI Metropolitan Statistical Area | 4.1 | 0.5 |
| Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area | 3.2 | 0.5 |
| Salt Lake City, UT Metropolitan Statistical Area | 3 | 0.5 |
| Dallas-Fort Worth-Arlington, TX Metropolitan Statistical Area | 4.2 | 0.6 |
| Houston-The Woodlands-Sugar Land, TX Metropolitan Statistical Area | 4.9 | 0.6 |
| San Antonio-New Braunfels, TX Metropolitan Statistical Area | 4.3 | 0.6 |
| St. Louis, MO-IL Metropolitan Statistical Area(1) | 3.7 | 0.7 |
| Sacramento--Roseville--Arden-Arcade, CA Metropolitan Statistical Area | 4.5 | 0.8 |
| San Diego-Carlsbad, CA Metropolitan Statistical Area | 4.3 | 0.8 |
| Denver-Aurora-Lakewood, CO Metropolitan Statistical Area | 3.6 | 0.9 |
| New York-Newark-Jersey City, NY-NJ-PA Metropolitan Statistical Area | 4.9 | 0.9 |
| Austin-Round Rock, TX Metropolitan Statistical Area | 3.9 | 1 |
| Riverside-San Bernardino-Ontario, CA Metropolitan Statistical Area | 5.3 | 1 |
| San Francisco-Oakland-Hayward, CA Metropolitan Statistical Area | 4 | 1 |
| Los Angeles-Long Beach-Anaheim, CA Metropolitan Statistical Area | 5.4 | 1.1 |
| San Jose-Sunnyvale-Santa Clara, CA Metropolitan Statistical Area | 3.9 | 1.2 |
The U.S. multifamily market is exemplifying a gradual trend towards stabilization following a period of non-standard trends since the onset of COVID-19. A notable uptick in apartment absorption has been recorded throughout the year, culminating in an annual absorption of 127,000 units—marking a positive shift since the 3rd quarter of 2022. Occupancy rates have stabilized around 94.5%, albeit a slight contraction from the onset of 2023, underscoring a steady reversion towards market normalization. However, rent growth has been restrained, with the influx of new supply serving as the main deterrent. The dampening of rent growth is almost exclusively tied to the strong supply coming online, as evidenced by submarkets with lesser supply influx witnessing more pronounced rent increases. The demand curve is upheld by persistent, albeit decelerating, job growth and improved consumer sentiment.
Venturing into 2024, the supply aspect significantly influences market dynamics with about 1 million apartment units under construction, projecting over 600,000 market-rate multifamily units to complete within the year, marking it as a notable period for apartment deliveries in recent decades. This surge in supply is anticipated to exert downward pressure on rents, embodying a classic economic scenario where excess supply moderates pricing. Nonetheless, a noticeable shift is expected in 2025 and 2026, with a 15% to 20% reduction in supply delivery across major U.S. markets, primarily attributed to a significant reduction in identified starts activity. While occupancy rates are predicted to align with historical norms, staying in the lower 94% range, rent growth in many markets is expected to remain within the 1% to 2% range. The broader narrative for 2024 suggests a stable demand outlook, albeit with moderated rent growth due to the notable volume of new supply.
