In 2023, national average asking rents increased by 1.6% in the multifamily rental market, according to a report from Yardi Matrix. The rent growth story is expected to be different this year, with Yardi Matrix forecasting two main shifts in this market. First, record available supply is expected to depress rent appreciation in many of the markets that saw growth during the pandemic. This could result in a handful of markets ending the year with negative growth. Yet, absorption has been robust and is expected to continue. However, it may take a year or more for this new supply to be fully absorbed.

The second factor of the year for this sector is the continued decrease in the spread between in-place rents and asking rents. Asking rents are typically a leading indicator of in-place rents. Currently, most markets still have a large gap between the two. Yet, that gap is expected to continue to shrink as asking rent increases remain stifled.

For the most part, the multifamily rental market is stabilizing. The large increases in asking rents that occurred in 2021 and 2022 have been vanquished with a modest growth of 0.8% in asking rents is expected across most markets in 2024. Finally, once the historically large amount of supply in the market is absorbed, a return to the usual 3-4% yearly growth in asking rents is anticipated.