A 7.1% increase in total operating expense is adding to the challenges multifamily investors are facing along with a glut of new units, according to a new report on the state of the nation's housing in 2024 by the Joint Center for Housing Studies of Harvard University.
Rising insurance premiums were the main culprit for the higher costs. They rose 27.7% year over year in January 2024, especially in the Southeast with its greater exposure to natural disasters. The report cited RealPage data showing that per unit property insurance costs in the 50 largest metro areas have more than doubled since the start of the pandemic, with Florida most affected.
In addition, net operating income growth has slowed, achieving just 2.8% in 1Q 2024 compared to 24.8% in late 2021.
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