​​Top Trends Across Cushman & Wakefield’s Multifamily Portfolio​

As we enter the final quarter of 2024, it’s worthwhile to reflect on the multifamily market’s resilient performance this year: Renter demand skyrocketed, occupancies held steady and rent growth showed signs of reacceleration. While we’re a far cry from the highs of 2021, the seeds are being sown for a recovery to take root. The fourth quarter, however, is typically the slowest, as few households seek big changes with winter holidays approaching. Early indicators of seasonality are emerging, but we’re encouraged by the relative strength of the market compared to last year.

The Cushman & Wakefield Asset Services team provides third-party management services for over 182,000 units nationally, making our team one of the largest in the country. This operation generates a trove of data and analytics, which we share regularly through articles like this and our multifamily newsletter, Multifamily Digest. Because this data is proprietary to our clients, we do not share aggregate levels among most metrics, but broader trends are instructive with respect to market performance. 

Rate Cuts Driving Renters to Reconsider Homeownership:

Since the Fed’s rate cut, mortgage rates continue to climb due to strong labor market reports and fueled by a strong and resilient economy. This is positive news for the health of the rental market, as a strong labor market ensures consistent apartment demand. Higher mortgage rates will likely slow renters’ shift to buy homes, keeping absorption robust in the near term.

Still No Cracks in Renter Finances 

We continue to monitor our portfolio for any signs of distress among our residents. So far, delinquencies remain near historic lows, with no discernable uptick. Compared to a year ago, delinquency rates have declined across all classes, indicating a very healthy renter pool.

Seasonality Is Back  

The key theme across the multifamily market this year has been the robust demand for apartments nationwide. More than 360,000 units have been absorbed nationally, which is up 44% from 2023’s full year total. Our foot traffic data has consistently previewed forthcoming demand, showing an increase in the first quarter, well ahead of reports confirming strong multifamily demand. That same data now reflects a slight slowdown as we head into the final quarter of the year.

Typically, demand cools in the fourth quarter as fewer people move once school resumes, temperatures drop and the holiday season nears. While we’ve seen this trend in our portfolio, demand indicators remain much higher than this time last year. So, while seasonality is a factor, we expect demand to stay stronger than it was a year ago.

Slower Foot Traffic Coinciding with Flat Occupancy

Since the middle of last year, our portfolio-wide occupancy has continued to strengthen. Today, we’re proud to report that our stabilized portfolio’s occupancy is ahead of the broader U.S. market. But with seasonally weakening demand, our portfolio-wide occupancy rate has flattened in recent months. After outperforming the market for the past year and a half, our occupancy growth is now mirroring the broader market trends.