26 Jan Forecasts Revised as Multifamily Rents Decline

Throughout the past two-and-a-half years, we have seen asking multifamily rents climb at the fastest pace on record, at 21.7%. But with this, the asking multifamily rents have now fallen month-over-month for the first time since May 2020. The Fed has been aggressive with rising interest rates to combat inflation. These rising rates will eventually take its toll on the job market, causing more layoffs and in turn leading to nonseasonal decreases in average asking multifamily rents. The overview of the market has many predicting that a recession will occur in Q3 or Q4 of 2023 but is not projected to last very long.

Once it reaches then, we will likely see broad declines or stagnation for the asking rents. It is also projected that these future declines would not in turn be enough to offset the gains that would be seen throughout 2023. The overall expectation of growth in average asking rents for 2023 is at 3.1%. There will likely be more declines or stagnation going into the start of 2024 for the asking rents, but the economy is projected to rebound fairly quickly. That should lead into a large growth period for the spring/summer in 2024. The overall average asking multifamily rent growth for 2024 is expected to be at 4.1%.