In a recent analysis, CBRE has reported signs of stabilization in the multifamily housing market. The first quarter of the year saw a slight uptick in average monthly rents, with a 0.4% increase from the previous year, settling at $2,163.

The beginning of the year marked the introduction of 73,700 new multifamily units, contributing to a significant 26% increase in the annual total, which now stands at a record-breaking 429,500 units. However, CBRE has observed a deceleration in new multifamily projects, which is expected to result in fewer units entering the market from 2025 onwards.

Despite an increase in the multifamily vacancy rate, which rose by 10 basis points to 5.5%, the market’s absorption rate has remained robust. The first quarter witnessed a net absorption of 52,200 units, ranking as the third highest for this period in more than 20 years.

Kelli Carhart, the head of multifamily capital markets at CBRE, commented on the resilience of the market, “Despite a surge in new units, absorption rates have been strong. We’re seeing sustained investor interest in multifamily properties, and we anticipate an uptick in capital allocation and deployment as the year unfolds.”

Additional insights from CBRE’s first-quarter report highlight:

• The Midwest and Northeast regions experienced positive rent growth year-over-year, with increases of 2.7% and 2.4%, respectively.
• Among the 69 markets monitored, 56 reported positive net absorption, led by Orlando, Florida (3,500 units), Austin, Texas (2,700 units), and Denver (2,500 units).
• A reduction in vacancy rates was observed in 27 markets, a notable improvement from the previous quarter.
• The multifamily investment volume reached its lowest quarterly figure since Q2 of 2020, dropping 28% to $19.8 billion.

This data indicates a cautiously optimistic outlook for the multifamily housing sector as it navigates through a period of adjustment and growth.