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Rent Forecast for the Multifamily Apartment Market in 2023


For the last several years, rent for multifamily apartments has increased significantly throughout all regions of the United States. This year many are forecasting lower-than-average rent growth and an increase in vacancy rates throughout 2023. The decrease in rent growth can be attributed to inflationary pressures and forecasted recessionary expectations.


Factors Contributing to the Rent Forecast for 2023

The vacancy rate is key to rent forecast.

According to Fannie Mae, the national multifamily vacancy rate is expected to slowly rise in 2023, from 5.5% in the fourth quarter of 2022, to an expected 6% by the end of 2023.

New supply will impact vacancy rate.

The vacancy rates are expected to rise as new supply will be delivered to the market over the next 12 months. However, much of the new supply consists of high-end Class A apartments. 

Many potential buyers will continue to rent.

Additionally, many renters that were looking to purchase homes will continue to rent until the home prices stabilize and rates start to decrease. 

2022 saw one of the most significant increases in interest rates in decades, over such a short period of time. Homebuyers that could purchase a home with a 3.5% fixed rate at the beginning of 2022 were faced with interest rates of 7% in the fall. This means that the purchasing power of the buyer was reduced by 50%, pricing new homeowners out of the market and forcing them to continue to rent.


A Rise in Concessions

According to Fannie Mae there was a rise in the percent of units offering concessions for all property classes in the fourth quarter of 2022. Fannie Mae expects more properties to offer higher-value concessions through 2023.


Signs of Growth

Markets with high employment rates will continue to see lower but moderate rent growth in 2023. Multifamily apartment fundamentals are still strong and are expected to improve by the end of the year.

Growth will vary across the country.

According to, January 2023 marked a turning point; it was the first time in five months that rent data showed positive growth. Top growth was seen in Midwestern markets, particularly in Indianapolis and Cincinnati. also reports that the Sunbelt regions have seen decreases in rents over the past year, except in Orlando and Miami, Florida. Las Vegas and Phoenix saw rent growth explode over the past several years, but it is now expected to stabilize.


Are Multifamily Apartments Still a Good Investment?

Overall, investing in multifamily apartments has been a very profitable and stable choice over the past decade. 

As inflation returns to normal and interest rates begin to decrease, the multifamily apartment market will benefit. We expect the rental property forecast to improve, and we expect to see increased occupancy rates, which will increase the net operating income of multifamily apartment projects.


Protect Your Property with the Right Loan

The best way to save money on your investment is to choose the right loan. Contact us to discuss the rent forecast for your location, to choose the best loan for a new project, or to refinance your existing project.

Schedule a free phone consultation with our team.

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