4 charts show storm clouds brewing

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Apartment rents expected to grow 2.3% this year link

• National effective rent growth is projected at 2.3% for 2025, with Richmond leading all cities. Austin, Denver, and Phoenix are the only major markets expected to see rent declines.

• Multifamily demand stayed strong in Q1 with a record 138,000 units absorbed, led by Atlanta, Phoenix, and Dallas. Anaheim was the only top market with net move-outs.

• Around 431,000 new units are expected this year, a 26% drop from 2024’s total, giving demand time to catch up. Rent growth also returned in Q1 with a 0.3% increase, the first positive Q1 since 2022.

Renters drive majority of U.S. household growth in 2024 link

• Rental households grew by 1.9% in 2024, adding 848,000 units and accounting for 54.5% of total household growth. This pushed the national total to a record 45.3 million rental households.

• The surge was supported by 591,600 new multifamily units and record levels of build-to-rent single-family construction. High mortgage rates and affordability challenges kept many would-be buyers renting longer.

• Younger educated adults and older renters over 50 are fueling demand, with one-third citing relocation flexibility as a top reason for renting. Only 20% of consumers believe it's currently a good time to buy a home.

Most apartment markets still below pre-pandemic occupancy link

• U.S. apartment occupancy in Q1 2025 stood at 95%, just under the 2015–2019 average of 95.2%. 29 of the 50 largest markets still trail their pre-COVID norms, especially high-supply Sun Belt cities like Fort Worth, Austin, and Charlotte.

• In the Midwest, 60% of major markets posted occupancy above their pre-COVID averages, with Indianapolis, Chicago, and St. Louis leading. Minneapolis lagged the most in the region, down 190 basis points from its norm.

• The Northeast remains the most stable, with nearly all major markets exceeding pre-pandemic occupancy levels. Boston was the only exception, falling just 10 basis points below its long-term average.

Importers rush to bonded warehouses as tariffs drive up storage demand link

• Demand for bonded warehouse space has surged due to tariff uncertainty, with some facilities like one in Bayonne, NJ leasing 220,000 square feet almost instantly. Flexe reported a sixfold increase in inquiries, and bonded space now costs up to 60% more than standard storage.

• Importers use bonded warehouses to defer paying duties, especially for Chinese goods entering through ports like Los Angeles and Long Beach, which handle about 40% of China-origin goods. This helps them avoid sudden financial hits while waiting on potential policy changes.

• The U.S. now has about 21 million square feet of bonded space, but it’s being snapped up fast, with firms like Afar Logistics in Tacoma seeing single clients fill entire 37,000-square-foot facilities. More warehouse operators are seeking certification despite the year-long approval process.

4 charts that show storm clouds brewing over the spring homebuying season link

• KB Homes lost $334 million in Q1 operations, and D.R. Horton’s sales dropped over 15% as new single-family starts fell 14.2% in March—the worst drop since April 2020. Builder sentiment remains negative, with the NAHB index at 40 and 60% of builders reporting a 6.3% rise in material costs.

• Trump’s fluctuating tariff policies caused a spike in Chinese import tariffs to 147.5%, raising construction costs by $10,900 per home. 27% of all U.S. residential construction imports come from China, hitting builders hard even as tariffs on other countries were paused.

• Buyer demand is shrinking—mortgage applications dropped 8.5% in early April and 55% of Americans say they are holding off on big purchases due to tariff fears. Despite this, 70% of sellers still believe it’s a good time to sell, and listings are rising in several markets.

Kaya

Kaya is an AI-powered copilot for real estate teams that automates data entry, streamlines workflows, and connects CRMs, communication tools, and transaction systems to save agents and brokers time and boost productivity.

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