Midwest Region Q1 Multifamily Market Insights: Rapid rent growth to start 2022, construction heating up

Highlights:

  • Deliveries of apartment properties in the Midwest region got off to a bit of a slow start to 2022 but are expected to accelerate across most markets through the end of this year and into 2023. Leading markets for new units include Chicago and Cincinnati.
  • Vacancy rates ended the first quarter averaging approximately 4.8 percent across the region, with some of the lowest rates in Milwaukee and St. Louis. Average vacancy rates are down 70 basis points from one year ago.
  • Rents in the Midwest have trended higher in the past several quarters. Rent growth in the first quarter averaged 2.5 percent, although a handful of markets posted gains ranging from 3 percent to nearly 4.5 percent. Year over year, rent growth reached 12.9 percent.
  • The median price in the tracked Midwest markets during the first quarter was approximately $139,000 per unit, while cap rates averaged 4.5 percent. The median price was pulled higher by transactions in a handful of markets. In many markets, pricing is closer to $100,000 per unit.

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