Figures

Rent Growth Eases Amid Rising Vacancy

U.S. Multifamily | Q3 2022

October 28, 2022 2 Minute Read

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Executive Summary

  • Q3 marked a second consecutive quarter of negative net absorption (-55,600 units).
  • The overall vacancy rate increased by 80 basis points (bps) quarter-over-quarter to 3.9% but remained well below the long-run average of 4.9%.
  • Average monthly net effective rent increased by 10.4% year-over-year in Q3 to $2,143, down from a 14.6% year-over-year increase in Q2 and a 15.2% increase in Q1. Average rent exceeded pre-pandemic levels in 68 of the 69 markets tracked by CBRE, except for San Francisco where it was 6.3% lower.
  • New construction deliveries of 91,900 units in Q3 brought the four-quarter total to 323,400—the highest level since the 1980s. With more than 860,000 units under construction, deliveries over the next year could rival the annual average during the housing boom of the 1970s.
  • Multifamily investment volume in Q3 decreased by 22% year-over-year to $69.8 billion but was the second highest third quarter on record. Year-to-date volume through Q3 was 20% higher than the same time last year, largely due to the strongest first half on record.