The U.S. multifamily market has enjoyed the smallest supply-demand gap in 11 quarters as it absorbed 170,000 units during the second quarter on 180,000 new units delivered. Vacancy remained stable from the first quarter at 7.8%, marking the first quarter in almost 3 years that vacancy has not risen, according to a report on 2Q multifamily rent trends by Apartments.com.

Asking rent growth dipped slightly year over year during June to 0.9% compared with 1% growth in the four prior months, although month-to-month rent growth decelerated to 0.1% after three months of 0.4% growth. Annual rent growth has hovered around 1% for about a year following a rapid deceleration in 2021 and 2022.

Both Midwest and Northeast markets turned in a strong performance with rent growth of 2.4% over the past four quarters. These markets have benefited from avoiding oversupply conditions, the report said. Western markets posted rent growth of 0.5% on weak demand and elevated completions, and heavy oversupply conditions in the South kept annual rent growth at zero, according to the report.