Minneapolis-St. Paul Q2 Multifamily Market Insights: Tight Vacancy and Rising Rents Prompting New Development

Highlights:

MN-q2
  • Supported by steady growth in the local economy, the Minneapolis-St. Paul multifamily market maintained solid operating conditions during the second quarter. Rents pushed higher at a faster clip than at the start of the year, while vacancy stayed in the low-4 percent range. Construction of new units is gaining momentum.
  • Local vacancy remained unchanged during the second quarter, finishing the period at 4.2 percent. Year over year, the rate improved by 10 basis points.
  • Apartment rents rose at an accelerating rate in recent months, increasing 1.9 percent during the second quarter to $1,466 per month. Year over year, rents are up 5.9 percent.
  • Transaction activity slowed in the last three months. The median sales price to this point in the year is $200,400 per unit, up 34 percent from the median price in 2021. Cap rates are averaging roughly 4.6 percent.

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