Better multifamily absorption through 2024 is expected to continue into 2025 even if the pace of absorption drops slightly as new deliveries slow thanks to several strong demand drivers.

According to an analysis by RealPage, 667,000 total units were absorbed last year even as job growth slowed. Sector observers will be keeping an eye on potential apartment demand concerns tied to moderating job growth in 2025, the analysis said.

The US economy is expected to add slightly more than one million jobs this year, representing job growth of 1%. This figure is below prior year job growth but still anything positive remains a driver in demand, helping drive rent expectations. RealPage also noted that the recent cycle of interest rate cuts may spur economic growth in some sectors, including information, professional/business services and financial activities.