- Quarterly demand rose to 230,819 units in the fourth quarter of 2024, while rolling four-quarter demand climbed to 666,699 units—marking the second-highest level in 25 years. Over 487,000 units are expected to be absorbed throughout 2025, potentially the third-largest annual total on record. Demand relative to supply over the past 12 months was strongest in San Francisco and the Midwest.
- A total of 155,408 units were delivered during the fourth quarter of 2024, reflecting a 3.2% decline from its record high in 3Q24. Deliveries are projected to decelerate further, with a more significant slowdown anticipated in 2025 and 2026. Markets that have already peaked in supply are likely to recover more quickly.
- The national vacancy rate, which peaked at 5.9% in 1Q24, declined by 70 basis points to 5.2%, driven by robust demand in the second half of the year. Current vacancy levels are 60 basis points lower than a year ago and 30 basis points below the long-term average.
- Sales volume totaled $45.5 billion in the fourth quarter of 2024, representing a 64% year-over-year increase. Despite subdued overall deal activity, large portfolio and entity-level transactions emerged throughout the year. Multifamily remains the top capital recipient in U.S. commercial real estate, comprising 34.7% of total trades.
- Approximately $769 billion in multifamily loans are set to mature between 2025 and 2027. Banks hold 24% of debt maturing from 2025 to 2033 but 42% of the near-term maturities from 2025 to 2027. Similarly, debt fund maturities are front-loaded, accounting for 21% in the near term versus 12% overall. In contrast, GSE maturities remain heavily backloaded.
- Private fund vehicles targeting North American commercial real estate launched from 2022 to 2024 have accumulated $274.5 billion in assets under management, of which $78.5 billion—about 71%—has been deployed. The remaining dry powder in these funds could drive greater deal flow in 2025.
- As of the fourth quarter, the average 30-year fixed mortgage rate in the U.S. was 69.8% higher than the effective interest rate on outstanding mortgage debt. This significant spread dampens the likelihood of a large recovery in home sales until the gap narrows. Existing home sales dropped to just 4.1 million units in 2024.
