Strong Q1 Absorption Boosts Multifamily Rent Growth

Executive Summary

• Renter demand continued to outpace new deliveries in Q1, lowering the overall multifamily vacancy rate to 4.8%.
• Average year-over-year effective rent growth increased to 0.9% in Q1 and is expected to continue accelerating in coming quarters as occupancy rises.
• Net absorption increased by 77% year-over-year in Q1 to 100,600 units. This is the highest Q1 absorption since 2000 and is more than triple the pre-pandemic Q1 average.
• Sixty-three of the 69 markets tracked by CBRE recorded positive net absorption in Q1. Typically, most markets record very low or negative net absorption in Q1.
• Construction completions slowed to 71,000 units in Q1 from 120,000 in Q4 2024, with fewer new deliveries expected in coming quarters.
• Q1 multifamily investment volume increased by 33% year-over-year in Q1 to $28.8 billion, the highest Q1 total since 2022.