Demand for market-rate apartments in Q1 was the highest first quarter recorded in RealPage’s 32-year data set
RICHARDSON, Texas--(BUSINESS WIRE)--RealPage®, a leading global provider of AI-enabled software platforms to the real estate industry, announced today its 2025 first quarter analysis of the multifamily housing market and key indicators to watch in the second quarter and beyond. Overall, the multifamily housing sector’s once-in-a-generation supply wave has crested nationwide, including in roughly 70 percent of the nation’s largest markets. Concurrently, demand for market-rate apartments in the first quarter was the highest first quarter reading ever recorded in RealPage’s 32-year data set. As previously predicted, waning apartment supply coupled with continued strong demand will result in rent growth moving toward more historical normal levels by the end of the year.
Q1 Industry Takeaways
- Over 116,092 market-rate apartments were delivered across the U.S. over the last three months, a continuation of the 50+ year high in apartment supply that is essentially on par with last quarter’s record high.
- Demand remained robust as 138,302 units were absorbed over the last three months.
- U.S. occupancy registered at 95 percent in the first quarter, a historically normal rate that has ticked up over the last year amid strong demand.
- Average effective asking apartment rents grew 0.8% in the year-ending first quarter. That rate registers below historically normal levels, but has grown modestly in recent months, particularly in metro areas with lower supply.
- Very strong demand continued across the Sun Belt, particularly in Dallas, Phoenix, Atlanta, Austin and Charlotte.
- Tampa, Minneapolis and Southern California also posted stronger than normal demand, with the exception of Orange County which saw lower demand than previous first quarters.
- Midwest markets, many that have experienced lower supply, generally saw the highest rent growth in the nation.
Q2 Industry Outlook
- RealPage forecasts over 156,000 market-rate units to be absorbed in 2nd quarter, essentially on par with 2nd quarter 2024's demand tally.
- RealPage forecasts demand to be especially robust in New York, Newark-Jersey City, Dallas and Charlotte as those markets concurrently deliver high volumes of new apartment supply.
- Nationwide, there are 585,000 apartment units under construction, with about 400,000 units expected to deliver within the next 12 months, growing total apartment inventory 2 percent nationwide.
- The South region of the U.S. will continue to garner the bulk of new supply with about 200,000 additional apartment units expected to be completed in the region over the next 12 months.
- New York, Phoenix, Newark-Jersey City and Dallas will be the national supply leaders as each market is poised to deliver more than 20,000 new apartment units in the next 12 months.
- New construction pipelines are drying up fastest in Austin, Raleigh/Durham, Jacksonville, San Antonio and Nashville. In all five of these markets, the number of units delivered in the previous 12 months more than doubles the number of units forecasted to deliver in the coming 12 months.
- Orange County (Anaheim), New York, Newark-Jersey City and Los Angeles are some of the only major markets forecasted to see apartment supply rise in the coming year.
RealPage will update its forecasts as macro conditions evolve. Please subscribe to the RealPage Analytics newsletter for a weekly dose of apartment market research and trends brought to you by a team of economists and multifamily analysts at https://www.realpage.com/analytics/subscribe/
About RealPage, Inc.:
RealPage is the leading global provider of AI-enabled software platforms to the real estate industry. By using RealPage solutions for operational excellence in the front office and throughout property operations, many leading property owners, operators and investors gain transparency into asset performance with data insights, enhancing experiences with customized tools and improving efficiencies to generate incremental yield. In 2021, 2022, 2023 and 2024, RealPage was recognized as ENERGY STAR® Partner of the Year for Sustained Excellence from the Environmental Protection Agency (EPA) and the U.S. Department of Energy. In 2024, RealPage was recognized as one of America’s Best Employers by Forbes and one of America’s Greatest Workplaces for Women by Newsweek. Founded in 1998 and headquartered in Richardson, Texas, RealPage joined the Thoma Bravo portfolio of market-leading enterprise software firms in 2021 to realize faster growth and innovation in serving more than 24 million rental units from offices in North America, Europe and Asia. RealPage has been certified as a Great Place to Work™ in India, the Philippines, the UK and the U.S.