CBRE EA has spilled much ink highlighting how multifamily new construction will suppress rental growth. A quarter of all markets, mainly across the South and West, will see rents decline on a rolling two-year basis in 2024. This resembles the market performance in 2020 but is much better than 2009, when 81% of all markets suffered rent declines.

However, the gap between the top markets (generally Midwest cities with little supply growth) and bottom markets (generally Southern cities with aggressive supply growth) is narrower than usual.

We are seeing a smaller performance gap among markets because slower economic growth will constrain rents nationally, not just in Sun Belt markets with significant supply risk. Rent growth for the median multifamily market will slow to just over 2% this year, its lowest level since 2010. The upshot is that short-term performance will be only partly driven by differences among markets, and properties will need strong asset management to generate better-than-average returns.