Multifamily Absorption Surges in Charlotte to Start 2025

Renter demand in the Charlotte multifamily market was elevated at the beginning of 2025, resulting in a modest vacancy dip despite continued deliveries of new units. Net absorption totaled more than 3,800 units during the first quarter, up more than 40% from the total one year earlier. Absorption has been strongest in South Charlotte and East Charlotte, with each submarket posting vacancy improvements during the past year. On the supply side, developers have remained active, but the number of units under construction has contracted by 23% during the past year, and permitting has been modest since peaking a few years ago. Elevated inventory growth since the beginning of 2023 has stalled rent growth, but this should subside as the pace of deliveries cools in subsequent years. Even after rising at a healthy rate during the first quarter, current asking rents are nearly identical to levels recorded one year ago.

Sales activity across the Charlotte metro area got off to a slow start to 2025, mirroring trends that occurred in the prior year. Transactions are still occurring, however, led by activity in the established East Charlotte and South Charlotte submarkets. Additionally, the rapidly expanding Iredell County submarket is gaining momentum, particularly in Mooresville. Since the beginning of 2024, Iredell County has accounted for more than 10% of the total transactions, and during the first quarter, approximately 25% of all sales took place in the county. Mooresville, the most populous town in Iredell County, is one of the fastest-growing suburbs in the country. Another driver of investment activity in the area is the surge in new inventory. Since the beginning of 2020, developers have delivered more than 4,600 units to the county, increasing inventory levels by nearly 65%.

Looking ahead

This year will mark another active period of supply growth in the Charlotte multifamily market, although delivery totals will slow from 2024 levels, and decline further beginning in 2026. Projects totaling 15,000 units are expected to come online for the full year. Much of the market’s inventory expansion is being fueled by a shift in housing demand that has been taking shape during the past several years. Net absorption nearly doubled from 2023 to 2024 and has gotten off to an accelerated pace to start this year. This renter demand should result in area vacancies remaining in the 8% range and allow for modest rent growth for the full year. Looking beyond 2025, supply growth is expected to decline significantly. Projects totaling fewer than 6,500 units are currently forecast to come online in 2026.

Sales activity in the Charlotte multifamily investment market may pick up in the coming quarters, as transaction volume in 2025 could ultimately track levels recorded last year. In recent years, newer construction has accounted for more than 25% of total transactions, although this trend did not hold during the opening months of this year. There will eventually be renewed investment activity in newer properties, particularly if recent leasing volumes prove to be sustainable. Opportunities may emerge in Iredell County, where investment activity has historically been concentrated among older vintages, but a wave of new inventory has come online since 2020 and should attract investor interest.

Learn more

Contact our Charlotte office for more information.