Large Markets Where Apartment Demand Far Outpaced New Supply in 2024
Roughly three-fourths of the nation’s 50 largest apartment markets saw demand exceed concurrent supply in 2024. Of those, five markets recorded excess demand of more than 3,000 units.
Apartment demand in the U.S. overall hit near its highest level in more than three decades in calendar 2024 and easily outpaced concurrent new supply, which reached decades-long highs. Roughly 588,900 apartment units came online in the U.S. in 2024, while nearly 666,700 units were absorbed, creating about 77,800 units of excess demand, according to data from RealPage Market Analytics.
That was quite a feat considering new supply was at a 50-year high. Aside from the rebound that occurred in 2021 due to pent-up demand following the onset of the COVID-19 pandemic, much of that excess demand took place in the West (29,809 units) and South (25,506 units) regions, but the Midwest (14,368 units) and Northeast (8,132 units) regions also recorded demand exceeding new supply levels in 2024.
The two markets with the most excess demand in 2024 were in the South region. Washington, DC absorbed 21,928 units during the year, while concurrent supply totaled 14,187 units. While that demand level ranked #6 nationally and the supply volume ranked #12 nationally, the 7,741 units of excess demand in Washington, DC during 2024 was the most seen nationwide. As a result, occupancy in DC climbed 130 basis points (bps) year-over-year to 96%, ranking #6 among the nation’s 50 largest markets.
Houston landed in the #2 spot nationally for excess demand of 6,849 units in 2024 after absorbing 31,925 units and receiving 25,076 units of new supply. That annual demand tally ranked #2 nationally, while concurrent supply ranked #4. With demand outpacing new supply in Houston during 2024, occupancy in the market increased 120 bps year-over-year, but the rate was still weak at 93.8% as of 4th quarter, which was a bottom 10 performance among the nation’s 50 largest markets.
Two West region markets (Las Vegas and Los Angeles) took third and fourth place for excess demand in 2024. Las Vegas absorbed 9,684 units and received 5,367 units in deliveries in 2024, taking demand 4,317 units above new supply. With demand outpacing new supply, occupancy rose 200 bps year-over-year to end 2024 with a rate of 94.6%. Los Angeles ranked #4 for excess demand in 2024 after absorbing 9,978 units and receiving 6,868 units of new supply, taking occupancy up just 30 bps year-over-year to 95.4%.
The only other large market where demand exceeded concurrent supply by more than 3,000 units in 2024 was Indianapolis. That Midwest market absorbed 9,485 units while 6,404 units came online, creating 3,081 units of excess demand and ranking #5 among the nation’s 50 largest markets. Occupancy in Indianapolis as of 4th quarter 2024 registered at 95% after rising 200 bps year-over-year.
