RealPage predicts stability for multifamily industry in 2025
- In 2025, around 500,000 new apartment units are expected to be delivered, impacting supply-demand dynamics.
- The average national occupancy rate remains steady, but economic challenges may lead to a tightening of rental housing inventory.
- The multifamily housing sector is focusing on resident retention and affordability as it adapts to evolving market conditions.
In the context of the American multifamily housing market, RealPage's Chief Economist Carl Whitaker has provided an analysis of the market's performance in 2024 and expectations for 2025. Despite fluctuations in occupancy rates, which averaged around 94.3%, the multifamily housing sector appears to be stabilizing. With a significant development surge, approximately 500,000 new apartment units are expected to come online, reflecting an elevated construction rate compared to historical norms. However, as the market faces economic challenges, the buildup of new apartment supply may slow down throughout 2025. As the past two years of new supply have aligned with overall demand, a visible softening of rent growth can be noted, particularly in Sun Belt metros experiencing a surge in supply that occasionally outpaces demand. During this period, retention has become a priority for rental operators as they contend with increasing turnover and marketing costs. As economic headwinds persist, operators are expected to focus on enhancing resident retention in an attempt to maintain occupancy and protect revenue streams. Guest speakers during RealPage's upcoming interactive webcast will delve into industry insights, discussing the implications of increased supply on rental rates, affordability, and the strategic responses of operators. The anticipated moderation in rent prices is a consequence of the influx of new units joining the rental market, alongside the predicted growth in renter demand. Despite potential challenges, there is optimism surrounding the overall stability and health of the multifamily housing market moving into the new year. In summary, the multifamily housing industry is navigating a complex landscape, marked by a significant increase in new units expected to deliver in the upcoming year. As the industry adapts to these changes, operators are tasked with balancing resident retention and overall affordability to ensure a positive rental experience amid economic fluctuations and developing housing trends.