< Back to Insights
Category: Apartments, Multifamily Tags: market report

Click to View the Most Recent Report

Market Report: Multifamily End of Year 2022

Market Overview

After two years of historical performance, multifamily real estate is moderating a bit, with rent growth slightly dipping in Q3 2022. Although shifting, national rent growth is still at a record high of 5.6 percent. Apartment demand is matching 2020 levels as interest rates are rising and mortgage payments become too expensive for many potential homeowners. The need for more affordable housing is stretching the 1- and 2-Star units thin, keeping the subsector’s vacancy low, while luxury 4- and 5-Star units are seeing vacancy rates rise in many markets. Overall, the multifamily sector is experiencing change, but steady rent growth and rising interest rates are playing in the market’s favor.


Key Highlights

  • National year-over-year rent growth declined by 360 basis points during the third quarter of 2022 to 3.8 percent
  • Midwest and secondary markets are not seeing as much of a decline as major coastal markets
  • Acquisition activity remained healthy, hitting $60B in Q3 2022
  • Market rent per unit is up $56 year-over-year, coming in at $1,610
  • 436,000 units are expected to be delivered by the end of 2022


Vacancy | Rent

The national vacancy rate for multifamily is 6.1 percent as of December 2022, a 1.2 percent increase year-over-year. The increase is a bit misleading though, as the large majority of vacancies is driven by the luxury market. Moderately-priced tertiary markets’ vacancy rates have remained below the national average. In addition, in-demand markets like Los Angeles and Chicago are seeing vacancy rates between 3.5 percent and 4.6 percent. Rent growth remains impressive even with an overwhelming amount of supply entering the market, with the average asking rent price per unit at $1,610. Once again, Midwest and gateway markets are stabilizing national rent growth as other markets experience a decrease.



The multifamily pipeline saw over 400,000 units delivered in 2022, according to the CoStar Group. The urgent demand for apartments created during the pandemic pushed developers to break ground as quickly as possible, but supply chain shortages and a tight labor market caused a large gap between planned and completed projects. Now, as demand has slowed, projected deliveries across the U.S. for 2023 are 494,000 units, the highest amount since 1986. Most of the projects underway are deeply concreted in the Sunbelt, but many investors believe the Midwest and Northeast markets that saw less demand and growth from 2020 to 2022 will lead the nation in demand and rent growth in 2023. Overall, luxury apartments continue to take precedence in the development pipeline, but high-end construction will fall off as four- and five-star facilities cater to a very narrow pool of renters that will dry up.


Sales Volume

Once again, multifamily was the chosen asset class for most investors, ranking first for transaction activity among the four major real estate sectors. The market brought in over $53B in sales volume in Q3 2022, with the average sale price per unit reaching $259,000. Even in a shifting marketplace, investors see multifamily rent growth as its strongest indicator of future performance. Rising interest rates have narrowed the buyer pool as financing becomes harder to secure. REITs are the best option for sellers during high-interest-rate periods, as the institutions often don’t need outside lending for larger acquisitions such as apartment complexes.



Urban Making a Comeback

Consumers fled to suburbia and secondary markets after the onset of COVID-19 looking for more space and affordability. This migration skyrocketed rent growth and demand in regions like the Sun Belt, bringing investors along with it. Now, metropolises such as New York, Chicago, and Los Angeles are gaining momentum back, reporting stronger rent growth and lower vacancy compared to previous quarters.



Younger generations are driving the development of open-air complexes and multi-use apartment buildings. In 2022, 72 live.work.play. properties were completed, providing flexible work space, local retailers, and amenity-packed apartment units. 2023 is set for success with a pipeline set to deliver more than 2022’s record. New York City, Seattle, and Philadelphia are some of the top markets for mixed-use investments.


Market Outlook

The multifamily sector is one of the most resilient asset classes in commercial real estate. Demand has slightly lowered but many markets are still seeing a need for mid-priced housing. National rent growth is strong, and investors are yearning to place capital into the market.


Los Angeles

Demand is high, and vacancy is way below the national average in Los Angeles, as the need for housing is indefinite. Development is focused in Downtown and Koreatown, with over 27,000 units under construction.

  • Market Rent Per Unit: $2,185
  • Vacancy Rate: 3.9%
  • Units Delivered: 9,200
  • Units Under Construction: 27,188



Ongoing job opportunities from corporate expansions into Nashville sustained a high-performing market throughout the last year 2022. Vacancy rate and rent growth has shifted in recent quarters, but investors are still bullish as the long-term outlook is positive.

  • Market Rent Per Unit: $1,625
  • Vacancy Rate: 8.3%
  • Units Delivered: 6,714
  • Units Under Construction: 21,651


Fort Lauderdale

Fort Lauderdale rent growth averaged nine percent over the last three years, securing the metro as a thriving multifamily market. Vacancy rate rose slightly in Q3 but is still below the national average.

  • Market Rent Per Unit: $2,212
  • Vacancy Rate: 5.5%
  • Units Delivered: 2,426
  • Units Under Construction: 12,315



The Dallas- Fort Worth market’s performance remained steady throughout 2022. The area is a leader for sales volume in the U.S. over the past two years and features a robust development pipeline.

  • Market Rent Per Unit: $1,502
  • Vacancy Rate: 8.0%
  • Unit Delivered: 8,719
  • Units Under Construction: 36,418



With a booming employment market and population growth, Atlanta is a hot spot for multifamily investment. Leading the nation in sales volume, Atlanta rent growth is moderating but the supply chain is widely active.

Market Rent Per Unit: $1,615

Vacancy Rate: 8.8%

Units Delivered: 9,587

Units Under Construction: 35,290



The Phoenix MSA is one of the primary markets that has struggled to keep pace with the unprecedented success its multifamily market had in recent years. But fundamentals show overall long-term profitability as Phoenix boasts one of the fastest growing populations in the nation, bringing with it growing demand.

  • Market Rent Per Unit: $1,565
  • Vacancy Rate: 9.0%
  • Units Delivered: 15,000
  • Units Under Construction: 27,712

Top Transactions of the Year

  • $230.66M sale of Modera West LA
  • Elliston 23 purchase for $162 million
  • $100M acquisition of The Crescent at West Hollywood
  • $54M sale of Avilla Lago in Phoenix, AZ
  • $44.75M sale of Loray Mills in Gastonia, NC
  • $86.6M Abberly Foundry acquisition in Nashville, TN

Recent Articles

Recent Media & Thought Leadership