MARKET SNAPSHOT
$1,287 3Q 2024
92.5% 3Q 2024
58 [YTD: 582]
2.6% 3Q 2024
+40 BASIS POINTS
50 [YTD: 207]
Strong demand in 2024 saw 582 units absorbed by the end of Q3, putting the market on track to exceed 800 units—37%, above the 2015-2019 annual average.
As of October 2024, 1,300 units were under construction, which is just slightly above the 10-year average of 1,180 units.
New Orleans’ annual effective rent growth has remained stable for seven consecutive quarters, with a 2.6% year-over-year increase in Q3 2024, bringing the average rent to $1,287.
As 2024 draws to a close, New Orleans’ multifamily market remains in solid shape. Demand has been strong throughout the year, with 582 units absorbed on a net basis by the end of the third quarter, putting the market on track to exceed 800 units—37% above the 2015-2019 annual. Rental demand has been strongest in mid-range and upper mid-range properties, particularly in areas like Uptown New Orleans and St. Tammany Parish. However, demand for workforce housing, which makes up about 37% of the city’s apartment inventory, has been weaker due to financial challenges faced by lower-income households.
Bucking national trends of reduced multifamily construction due to high borrowing and construction costs, developers remain active in New Orleans. As of October 2024, 1,300 units were under construction, which is just slightly above the 10-year average of 1,180 units. The majority of these units (700) are being built in the Eastbank/Jefferson Parish submarket, with another 300 in the Downtown area. Recent completions in the latest quarter were concentrated in three of the metro’s fifteen submarkets: Uptown New Orleans (82 units), New Orleans East (75 units), and Eastbank/Jefferson Parish (50 units).
The average occupancy rate in New Orleans continued its upward trend for the fourth consecutive quarter, rising 10 basis points quarter-over-quarter to reach 92.5% by mid-2024, with a 40-basis-point annual gain. This improvement was fueled by stronger consumer confidence and a slowdown in new deliveries over the past year. At the submarket level, thirteen of New Orleans’ fifteen submarkets reported stable or rising occupancy rates compared to the previous year. Plaquemines Parish, on the west bank of the Mississippi, led with a notable 420-basis-point increase, while New Orleans East, on the southeast bank of Lake Pontchartrain, experienced a sharp 490-basis-point decline.
Annual effective rent growth in New Orleans has been remarkably stable over the past seven quarters, dipping below 2.0% only once. In the third quarter of 2024, rents increased by 2.6% year-over-year, bringing the average effective rental rate to $1,287. While market-wide rent growth remained steady, there was notable variability across submarkets. All fifteen of New Orleans’ submarkets saw annual rent increases, though the rates differed significantly. The Gentilly submarket, near the urban core, led the way with a 7.5% increase, while Bywater posted a more modest 0.2% growth. Looking ahead, rent growth is expected to accelerate further, supported by strong demand. With new unit completions spread fairly evenly over the next five quarters, the market should avoid any significant supply shocks, helping to maintain balance and support steady rent increases.
In August 2024, the New Orleans, LA metro experienced a slight loss of 600 jobs, marking a 0.1% year-over-year employment decline. Despite this modest drop, the Professional and Business Services sector stood out as a key driver of job creation, adding 1,900 new positions, representing a robust 3.6% increase. The Government sector also contributed positively, with 1,600 jobs added, reflecting a 2.4% increase. Meanwhile, the metro’s unemployment rate remained relatively stable at 4.3%, close to the national average of 4.2%, signaling continued labor market stability amid the overall economic fluctuations.
August 2024 ANNUAL JOBS CREATED
AUGUST 2024 EMPLOYMENT GROWTH
AUGUST 2024 Unemployment rate
4.2% us August rate
Nominal Change
from August 2023
to August 2024: 1,900
Percent Change: 2.6%
Nominal Change
from August 2023
to August 2024: 1,600
Percent Change: 2.4%
Nominal Change
from August 2023
to August 2024: 1,000
Percent Change: 0.9%
Nominal Change
from August 2023
to August 2024: 900
Percent Change: 3.7%
Nominal Change
from August 2023
to August 2024: 500
Percent Change: 1.7%
| Sector | Nominal Change from August 2023 to August 2024 | Percent Change |
|---|---|---|
| Education and Health Services | 1,900 | 2.6% |
| Trade, Transportation, and Utilities | 1,600 | 2.4% |
| Manufacturing | 1,000 | 0.9% |
| Mining, Logging, and Construction | 900 | 3.7% |
| Financial Activities | 500 | 1.7% |
| Other Services | -500 | -1.7% |
| Government | -700 | -9.7% |
| Information | -800 | -0.7% |
| Professional and Business Services | -1,100 | -3.4% |
| Leisure and Hospitality | -3,400 | -4.2% |
Toronto-based Woodland Biofuels, Inc. announced a $1.35 billion investment to build one of the world’s largest renewable biofuels facilities at the Port of South Louisiana in St. John the Baptist Parish, with the first phase set to begin operations in 2028.
The Louisiana International Terminal project will allow the port to serve larger ships, positioning Louisiana as the premier Gulf Coast gateway to import goods and move U.S. products around the world.
In February 2024, Japanese chemical company UBE Corporation announced a $500 million investment in Jefferson Parish to establish its first U.S. manufacturing facility for key components of electric vehicle batteries.
As 2024 comes to a close, New Orleans’ multifamily market remains strong, with nearly three-quarters of the metro’s submarkets reporting occupancy rates above 94%. This tightening correlates with a surge in commercial development, which is expected to boost job growth and drive housing demand. As a result, the rental market is positioned for continued growth, with improving occupancy, a measured pace of housing development, and expanding economic conditions likely to push rent increases above 4% by mid-2025.
While New Orleans has historically relied on tourism, the region is now experiencing broader economic expansion. Several billion-dollar projects set to launch soon will fuel growth in the construction sector, and the massive Louisiana International Terminal project is expected to bolster the logistics sector for years to come. These developments, combined with strong market fundamentals and steady demand, suggest a positive long-term outlook for the region’s apartment market.
Sources: Costar; ESRI; U.S. Census Bureau; Yardi Matrix; U.S. Bureau of Labor Statistics
