Economists pick their favorite apartment markets in 2024

Top-Performing Apartment Demand Markets in 2023 link

• U.S. apartment demand saw a rebound in 2023, with only a few markets exceeding an annual demand of over 8,000 units. Most of these high-demand markets are in the South, with Texas cities like Houston, Austin, and Dallas leading in absorption rates.

• Houston emerged as the top market, absorbing over 15,600 units. Austin and Dallas followed with nearly 11,400 and about 10,200 units, respectively. Other notable markets include Washington, DC, Charlotte, Atlanta, Nashville, and Raleigh/Durham, each showing significant demand.

• The trend wasn't confined to the South, as Phoenix and Minneapolis also recorded substantial demand. Phoenix exceeded 12,000 units, while Minneapolis approached 8,700 units, highlighting diverse geographic appeal in the apartment market.

A Comprehensive Analysis of American Migration Patterns link

• The pandemic and remote work have reshaped U.S. migration, with people leaving major cities for more affordable, less dense areas. In 2023, however, this trend showed signs of stabilizing, with fewer long-distance moves and more renters opting to stay in their current regions.

• West Coast and Northeast states, particularly California and New York, continue to see significant population outflows, primarily to Sunbelt and Mountain West regions. Despite a decrease in the magnitude of these migrations in 2023, the overall trend persists, with states like Florida and Texas experiencing notable population inflows.

• At a metro level, North Carolina, South Carolina, and Florida dominate the list of top destinations for renters from other areas. This reflects a broader trend of Americans seeking affordability and lifestyle changes, with metros like Durham, NC, and Charleston, SC, attracting significant interest from out-of-state renters.

Economists pick their favorite apartment markets in 2024 link

• In 2024, the U.S. apartment market is set to witness a record-breaking supply of approximately 670,000 units, surpassing the 2023 record of 440,000 units. This surge in supply, coupled with factors like job growth and improved consumer sentiment, is expected to significantly impact market dynamics.

• Midwest markets such as Chicago, Cincinnati, Cleveland, and Columbus, along with Northeast metros Boston and New York, are predicted to lead the nation. These markets ended 2023 with high occupancy rates above 94% and experienced above-average rent growth, indicating a stable and growing demand for apartments.

• Surprising upside potential is seen in markets like Houston, San Diego, San Jose, and Washington, DC. Houston, for example, shows a balanced supply-to-demand ratio, potentially outperforming other Texas markets. Washington, DC, is also expected to excel for the first time in years, despite a concentrated supply in specific submarkets.

Affordability boosts Indianapolis housing market link

• Indianapolis is emerging as a top real estate market in 2024, driven by its affordability, strong economy, and job growth. The city's housing inventory and demand dynamics are attracting buyers seeking a more affordable lifestyle.

• The real estate market in Indianapolis offers more favorable conditions compared to the national average. With a median home price of around $330,000, it's significantly lower than the national median. The market is also showing signs of stability with a decrease in the percentage of homes posting price cuts.

• The demographic trends in Indianapolis, particularly among baby boomers and millennials, are influencing the real estate dynamics. Many young adults are returning to the city post-college, leading to a corresponding movement of their parents and grandparents, further stimulating the housing market.