Strong Absorption Drives Down Multifamily Vacancy Rate

Executive Summary

• The overall multifamily vacancy rate increased by 10 basis points (bps) year-over-year in Q2 to 4.3%.
• Net absorption of 167,000 units in Q2 outpaced construction completions for the second consecutive quarter but was down from 191,000 units a year ago.
• All 69 markets tracked by CBRE recorded positive net absorption in Q2, up from 65 in Q1.
• Average monthly rent increased by 0.5% year-over-year and 1.5% quarter-over-quarter in Q2 to $2,257. The quarterly increase is consistent with typical pre-pandemic seasonality.
• Construction completions totaling 77,700 units fell by 14% year-over-year in Q2 and are expected to further decline through year-end.
• Multifamily investment volume fell by 2.7% year-over-year in Q2 to $34.9 billion. Individual property sales declined by 10.4% to $26 billion, while portfolio sales decreased by 19% to $5.6 billion. Those declines were partially offset by $3.4 billion in entity-level transactions, up from zero a year ago.