Picture an America where soaring demand, record supply, and evolving renters are reshaping where we live, driven by the stunning fact that in 2023 the U.S. apartment market surged to 44.1 million units, fueled by a 2.5% annual growth rate and a massive $250 billion in annual revenue.
Key Takeaways
- The U.S. apartment market reached 44.1 million units in 2023
- Multifamily housing accounted for 18% of the total U.S. housing stock in 2022
- Apartment construction starts totaled 711,000 units in 2022
- National average rent reached $1,709 in December 2023
- Rent growth slowed to 3.1% YoY in Q4 2023
- Median rent for studios was $1,441 in 2023
- National vacancy rate was 6.6% in Q4 2023
- Occupancy rate for Class A apartments was 95.2% in 2023
- Absorption totaled 250,000 units in 2023
- Multifamily starts reached 460,000 units in 2023
- Under-construction inventory peaked at 800,000 units 2023
- Completions totaled 436,000 units in 2023
- Millennials comprise 45% of apartment renters
- Gen Z renters grew 20% from 2020-2023
- 37% of renters are aged 25-34 in 2023
The U.S. apartment market is expanding but facing growing affordability challenges.
Demographics and Consumer Trends
1Millennials comprise 45% of apartment renters
Verified2Gen Z renters grew 20% from 2020-2023
Verified337% of renters are aged 25-34 in 2023
Verified4Single-person households represent 35% of renters
Directional555% of renters prioritize amenities over location
Single source6Remote workers increased apartment demand by 15%
Verified762% of renters are non-homeowners under 35
Verified8Hispanic renters grew to 25% of total in 2022
Verified9Average renter household income was $52,000 in 2022
Directional10Pet ownership rose to 70% among renters 2023
Single source1140% of renters under 30 prefer urban apartments
Verified12Female-headed households 25% of renters
Verified13EV charger demand up 30% among renters 2023
Verified1428% of renters aged 35-44 in 2022
Directional15Shared living appeals to 22% of young renters
Single source16Median renter age rose to 32 in 2023
Verified17Black renters 20% of market share 2022
Verified18Fitness amenities sought by 75% of prospects
Verified19Boomerang kids boosted household formation 10%
Directional20Tech-savvy renters 65% use apps for leasing
Single sourceDemographics and Consumer Trends Interpretation
The apartment market is no longer just about four walls and a roof, but a curated lifestyle hub catering to a debt-saddled, pet-toting, tech-dependent, and amenity-obsessed generation that views remote work as a feature, homeownership as a fantasy, and an EV charger as a non-negotiable.
Market Size and Growth
1The U.S. apartment market reached 44.1 million units in 2023
Verified2Multifamily housing accounted for 18% of the total U.S. housing stock in 2022
Verified3Apartment construction starts totaled 711,000 units in 2022
Verified4The rental apartment sector grew by 2.5% annually from 2018-2023
Directional5U.S. multifamily occupancy averaged 94.5% in Q4 2023
Single source6Institutional apartment ownership controlled 15 million units in 2023
Verified7The apartment industry generated $250 billion in revenue in 2022
Verified8Multifamily completions hit a record 509,000 units in 2021
Verified9Apartment demand exceeded supply by 300,000 units in 2023
Directional10The U.S. had 22.8 million renter households in 2022
Single source11U.S. apartment inventory hit 44.2 million units Q1 2024
Verified12Multifamily market cap rates averaged 5.4% in 2023
Verified13Apartment sales volume reached $75 billion in 2023
Verified14Rent rolls valued at $1.2 trillion nationally 2023
Directional15Institutional portfolios averaged 25,000 units per owner
Single sourceMarket Size and Growth Interpretation
Despite feverish construction that's adding apartments at a near-record pace, the American rental market remains a pressure cooker, where relentless demand, astronomical valuations, and institutional consolidation have turned the simple need for shelter into a $1.2 trillion financial battleground.
Occupancy and Vacancy
1National vacancy rate was 6.6% in Q4 2023
Verified2Occupancy rate for Class A apartments was 95.2% in 2023
Verified3Absorption totaled 250,000 units in 2023
Verified4Vacancy rates rose to 7.1% in new deliveries 2023
Directional5Physical occupancy averaged 93.8% nationally 2023
Single source6Demand for apartments was 320,000 units in 2023
Verified7Stabilized occupancy held at 94% through 2023
Verified8Vacancy increased 80 bps YoY to 6.9% in Q3 2023
Verified9Net absorption slowed to 180,000 units H2 2023
Directional10Economic occupancy dipped to 92.5% in 2023
Single source11Stabilized vacancy at 7.2% Q1 2024
Verified12Lease-up pace slowed to 92% in 60 days 2023
Verified13Demand outpaced supply by 50,000 H1 2023
Verified14Class B occupancy 93.1% nationally 2023
Directional15Turnover rate averaged 48% in 2023
Single source16Atlanta vacancy rose to 8.5% 2023
Verified17Net absorption 220,000 units Q1-Q3 2023
Verified18Economic vacancy 91.8% for new builds 2023
Verified19Occupancy recovered to 94.1% post-pandemic
DirectionalOccupancy and Vacancy Interpretation
The apartment market is a seesaw of resilient demand and oversupplied caution, where the posh towers are practically full while new ones try to charm renters with elbow room and a whiff of desperation.
Rental Rates and Affordability
1National average rent reached $1,709 in December 2023
Verified2Rent growth slowed to 3.1% YoY in Q4 2023
Verified3Median rent for studios was $1,441 in 2023
Verified4One-bedroom rents averaged $1,630 nationally in 2023
Directional5Rent burden exceeded 30% for 50% of renters in 2022
Single source6Luxury apartment rents grew 4.2% in 2023
Verified7Average two-bedroom rent was $1,884 in 2023
Verified8Rent affordability ratio hit 28.5% of median income in 2023
Verified9Suburban rents rose 5% faster than urban in 2023
Directional10Effective rent growth was 2.8% in Sun Belt markets 2023
Single source11Rent growth peaked at 14% YoY in 2022 early
Verified12Asking rents up 25% since 2020 low
Verified13Three-bedroom rents averaged $2,320 in 2023
Verified14Rent concessions offered in 40% of units Q4 2023
Directional15Affordability gap widened to 10 million units 2023
Single source16Mid-tier rents grew 3.5% YoY 2023
Verified17Rent-to-income ratio at 29% for millennials
Verified18Phoenix saw 6% rent growth in 2023
Verified19NYC median rent $4,100 in 2023 peak
DirectionalRental Rates and Affordability Interpretation
The brakes are being gently tapped on a rent rocket that has already soared to stratospheric heights, leaving half the passengers straining under the weight of the ticket.
Supply and Construction
1Multifamily starts reached 460,000 units in 2023
Verified2Under-construction inventory peaked at 800,000 units 2023
Verified3Completions totaled 436,000 units in 2023
Verified4Permits issued for 450,000 multifamily units 2023
Directional5New supply added 4% to inventory in top markets 2023
Single source6Sun Belt construction boom added 200,000 units 2023
Verified7Class B/C supply growth was 1.5% nationally 2023
Verified8Total under construction fell 10% YoY late 2023
Verified9Adaptive reuse added 15,000 apartment units 2023
Directional10Forecast completions: 400,000 units in 2024
Single source1132% of new units were workforce housing in 2023
Verified12Completions forecast 350,000 in 2024
Verified13Under construction down 5% YoY Q4 2023
Verified14550,000 units permitted in top 50 markets 2023
Directional15New deliveries 120,000 units Q4 2023
Single source16Southeast supply growth 3.2% 2023
Verified17Purpose-built student housing added 50,000 beds
Verified18LIHTC units delivered 120,000 in 2022
Verified19Total starts declined 25% late 2023
Directional20Senior housing construction up 10% 2023
Single sourceSupply and Construction Interpretation
The market is in the midst of a massive but rapidly cooling building binge, where we flooded the Sun Belt with new units, got clever with old buildings, and finally remembered to house our workers and seniors, all while the pipeline behind it all is now decisively slowing down.
Sources & References
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