US Apartment Rent Growth Trails Expectations Through Q2

On Monday, RealPage, a technology provider for real estate owners and managers, released its Q2 US apartment forecast.

RealPage’s delivery pipeline anticipates just over 629,000 apartments will be delivered in calendar 2024. However, supply is expected to drop by roughly 20% in 2025, with nearly 497,000 units scheduled for completion. In terms of demand, over 612,000 apartment units are expected to be absorbed in 2024, with a 12% drop anticipated in 2025.

Despite strong demand, rent growth has been somewhat slower than expected year-to-date through Q2 due to various exogenous factors. RealPage’s most recent forecast indicates that 50% of the top 50 markets should see annual rent growth between 2% and 3% this year. Additionally, 24% of these markets are likely to experience growth between 1% and 2%, 18% could see growth below 1%, and a few markets are anticipated to see virtually no growth at all. Notably, only Atlanta and Jacksonville are expected to experience rent cuts of 1% or more.

Looking ahead to 2025, RealPage is anticipating a different landscape. With somewhat weaker supply, robust demand, and a more favorable economy, approximately 40% of the top 50 markets could experience annual rent growth of more than 3%. About 55% of the markets are expected to see rents grow between 2% and 3%, while a little over 5% could record growth below 2% in 2025.