The average annual effective rent growth in the U.S. in 2019 was 2.8%, down 80 basis points (bps) from the 2018. The market has been responding to underlying demand fundamentals—such as household rent burdenship trends—rather than overheating. Nearly 250,000 net units absorbed during the year, down 17.1% from 2018. Non-Non-gateway markets continued to outperform the U.S. average as rents increased 3.1%. Non-gateway Class B (3.3%) and low-rise (3.4%) assets posted the largest rental rate gains while Class C product, reported the lowest vacancy of all the subasset types.
- Vacancy continued to decline in 2019, ending the year at 4.2%—a historic annual low. Rent growth averaged 2.8% for the year, led by non-gateway markets and Class B assets. There is potential for ongoing rental rate gains ahead as new supply declined by 6.0% in 2019.
- Investors deployed more than $170 billion (B) in multifamily acquisitions in 2019, a new record. U.S. multifamily volume growth for the calendar year increased by roughly 2%, dominated by single-asset sale transactions.
- Stand out markets in terms of transaction volume were Boston, Seattle, Las Vegas, Baltimore and Phoenix—evidence
that growth across market tiers and geographies was due to local market dynamics. - The NCREIF Property Index (NPI) reported higher total return in Q4 2019 compared to Q3 2019, resulting in an overall total return of 5.5% for 2019 among multifamily assets.