Multifamily Demand Reaches Seven-Year High in 2017

  • The U.S. multifamily market remains very dynamic, with peak development and demand levels. Performance is good, although not as stellar as earlier in the cycle. 
  • Multifamily demand remained very strong in 2017, as evidenced by the 241,200 units absorbed over the year-the second-highest annual total during the recovery/expansion period.
  • The Q4 vacancy of 4.9% was relatively low, but up marginally from a year ago.
  • New deliveries remain at peak levels, with 265,900 units completed in 2017.
  • The average monthly effective rent of $1,628 in the markets tracked by CBRE Econometric Advisors (CBRE EA) was down by 0.3% from the prior year, a slight improvement over Q3's year-over-year decline of 0.5%. The national average is weighted down by year-over-year rent declines in a few large markets; most markets (79%) experienced rent growth, albeit modest.
  • The annual acquisitions total fell below 2016's peak volume, but the decline was smaller than had been expected. The 2017 total of $150.1 billion was 6.9% below 2016's total.