Multifamily Rents and Profit Margins Continue to be Weighed Down
This year multifamily property owners will likely face lower rental growth and rising operating expenses, narrowing profit margins and affecting refinancing attractiveness to lenders. Moody’s forecasts U.S. rent growth in the low-to-mid 1% range for Q2 2024. The gap between asking and effective rents on average has remained above $90 for the past three months, reflecting the highest concession levels recorded in Moody’s tracking history. Oversupply is one of the major driving factors weighing down rent, with a notable increase in multifamily housing. In June 2024, privately-owned housing completions rose by 10.4% to a seasonally adjusted annual rate of 1.71 million units, including a 26.2% month-over-month increase in multifamily units—reaching the highest rate since September 1974.
