Trimont U.S. Multifamily Market Tracker
Trimont Research’s U.S. Multifamily Market Tracker provides a comprehensive overview of multifamily commercial real estate (CRE) market conditions. The tracker is updated monthly and aggregates data from multiple sources, with direct links included in the descriptions below. We categorize the data into four distinct, but related, groups: rents, demand, supply, finance, that enable users to concisely analyze market conditions at the national and local levels. Each category should be viewed in the context of the others. The tracker also includes Trimont Research’s Market Activity Risk Matrix for additional insight.
Please note: Data in the tracker is available for viewing only and cannot be downloaded. For more information, please contact the Trimont Research Team at research@trimont.com.
- Multifamily Construction Activity: Multifamily construction activity is typically analyzed in distinct phases: permitting, construction starts, and completions. An increase in permits generally precedes a rise in construction starts, which ultimately leads to higher completion rates. The timing and progression of these phases can vary significantly across markets, as developers may proceed at different speeds due to market-specific factors. Additionally, not all issued permits result in actual construction. Despite these variations, construction data provides valuable insight into anticipated surges in new deliveries, which can impact rental rates depending on the proportion of new inventory entering the market. It is important to consider market demand alongside supply; markets with weak or negative household formation rates may face greater challenges in absorbing new units.
- Inventory Growth: The Inventory Growth map ‘builds’ (pun intended) on information found in the Multifamily Construction Activity graphic, which readily shows trends in construction activity, but doesn’t provide much insight into the scale of this construction. That is where the Inventory Growth map can help. These data are derived from data from CoStar, a leading provider of commercial real estate information, analytics and news. Shading on the map gives us information about projected supply growth for the current and upcoming year.
- Multifamily Production Index: The National Association of Homebuilders (NAHB) conducts a quarterly survey of multifamily developers in active markets to assess current conditions for multifamily starts across various property types, including Total, Garden/Low Rise, Mid/High Rise, and Subsidized properties. The survey results are presented as diffusion indices, calculated using the formula: (Good – Poor + 100) / 2. An index value above 50 indicates favorable market conditions for new starts, while a value below 50 suggests unfavorable conditions. These indices offer valuable insights into the optimal timing for transitioning from the permitting stage to construction starts, depending on the type of multifamily development.
- U.S. Completions by Asking Rents; U.S. Completions by Number of Bedrooms: The quarterly Survey of Market Absorption of New Multifamily Units (SOMA), sponsored by HUD, utilizes the Census Bureau’s Survey of Construction (SOC) as its sampling base. Each month, SOMA selects a sample of residential buildings with five or more units to monitor the absorption of newly completed multifamily developments. While SOMA’s primary objective is to track market absorption rates, the data can be repurposed within the Tracker to provide additional insights. By integrating SOMA results with information from the Demand page, it is possible to identify potential mismatches between demographic trends, affordability, cost-of-living, and the types of new completions. Such analysis can inform expectations for new property lease-ups and market performance.