Multifamily Vacancy Falls to 3.6%, Lowest Level Since 2000

  • Vacancy fell to 3.6% in Q3, down 40 basis points (bps) from the prior year and the lowest level since 2000.
  • Average rent rose 2.9% year-over-year, on par with Q2 and slightly higher than the historical average of 2.6%.
  • Construction remained active in Q3 with 66,300 units delivered. The 256,000-unit trailing four-quarter total fell slightly from the prior year.
  • Net absorption of 307,600 units outpaced completions of 256,000 for the year ending in Q3, demonstrating the sustained high levels of multifamily demand throughout the U.S.
  • Investment totaled $46 billion in Q3, down 7.3% year-over-year. The trailing four-quarter total of $184 billion, however, was up 8.8% year-over-year.
  • Phoenix and Las Vegas had the highest year-over-year rent growth rates—both over 7%. Major markets with the lowest vacancy rates were New York City (2.5%), Detroit (2.6%) and Boston (2.7%).
  • Capital remained widely available for multifamily borrowers in Q3. Fannie Mae and Freddie Mac’s new multifamily loan production totaled $47.6 billion for the quarter, up more than 30% from the prior year.