Multifamily Economic and Market Commentary

April 2023

Multifamily Urban and Suburban Submarket Performance Showing Similar Trends

The multifamily sector has experienced significant shifts over the past three years, including COVID-19-related 

shocks followed by an unprecedented recovery and historic rent hikes. Additionally, an ongoing surge in the 

supply of multifamily units, coupled with inflationary pressures, set the stage for an unusual period for the 

multifamily sector in 2022. While the national average rent level had rebounded to pre-pandemic levels by Q2 

2021, over the second half of 2022 both urban and suburban submarkets experienced similar levels of slowing 

rent growth, according to data from RealPage, Inc.

Rent growth in submarkets designated as suburban by RealPage was significantly stronger than in urbandesignated submarkets, especially during much of 2020, and still maintained a lead well into early 2022. 

Indeed, the quarter-over-quarter rent growth spread as wide as 3.0% between urban and suburban 

submarkets in Q4 2020. Urban submarket rent growth grew at less than half of the rent growth of suburban 

submarkets from Q4 2019 to Q4 2022 at 13.6% versus 26.0%, respectively. 

Urban submarket rent growth closely tracked the growth levels experienced by suburban submarkets during 

the peak of multifamily rental demand in mid-2021. Rent growth on average jumped as high as 5.9% for urban 

submarkets and nearly 6.2% in suburban submarkets in Q3 2021. Following several quarters of robust growth, 

both the urban and suburban submarket asking rents contracted in tandem in Q4 2022, as seen in the chart 

below. 

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

Suburban Urban

Source: RealPage, Inc.

Quarter-Over-Quarter Change in Asking Rent – Q4 2019-Q4 2022

1
Major Urban Submarkets Seeing Lagging Demand...

Urban submarkets made up most of the metros with the least amount of rent growth during the period. While 

some markets’ surplus supply kept the rent increases at bay, others are seeing a fall-off in demand. Notably, 

San Francisco’s costly urban and suburban submarkets have not exceeded their pre-pandemic highs, with its 

urban submarkets falling behind with a rent growth of negative 11% from Q4 2019 to Q4 2022.

In addition to San Francisco, other major urban submarkets featuring below-average rent growth included 

Oakland, Portland, Seattle, San Jose, and Los Angeles – all of which are expensive metros on the West Coast. 

We believe that while these metros can boast being home to highly skilled tech and professional services 

workers, the effect of telework on some of these metros has lasted far longer than many expected. 

Additionally, the higher cost of living in these metros has likely contributed to some residents moving to more 

affordable (yet still reasonably close-by) suburban submarket neighborhoods. 

2

Multifamily Economic and Market Commentary

Increased Demand in Sunbelt Metros

Although rent growth increased more in suburban submarkets, in many cases the top suburban submarkets in 

rent growth have now been joined by their corresponding urban submarkets. The greatest rent growth 

occurred in Sunbelt metros, as seen in the chart below, with only one non-Sunbelt metro – Salt Lake City –

making the cut. Interestingly, of the Sunbelt metros, 11 of the 18 are located in Florida. Tampa’s suburban 

submarket rent levels, for example, increased a remarkable 43.8% over the past three years. 

Rent levels in many Sunbelt metros have grown at an unprecedented rate, as many people moved to the 

region’s relatively more affordable metros. With increased demand in these metros, rent increases followed.

Increase in Average Rent by Submarket Type – 4Q2019 – 4Q2022 – Select Metros

Source: RealPage, inc.

0% 10% 20% 30% 40% 50%

Atlanta, GA–Sub.

Tampa, FL–Urb.

Salt Lake City, UT–Sub.

Greensboro, NC–Sub.

Charlotte, NC–Sub.

Orlando, FL–Sub.

Riverside, CA–Urb.

Phoenix, AZ–Sub.

Las Vegas, NV–Urb.

Riverside, CA–Sub.

Greensboro, NC–Urb.

Miami, FL–Sub.

Jacksonville, FL–Sub.

Fort Lauderdale, FL–Sub.

Miami, FL–Urb.

Jacksonville, FL–Urb.

Fort Lauderdale, FL–Urb.

West Palm Beach, FL–Urb.

West Palm Beach, FL–Sub.

Tampa, FL–Sub.

-15% -10% -5% 0% 5% 10% 15% 20%

San Francisco, CA–Urb.

Oakland, CA–Urb.

San Francisco, CA–Sub.

Portland, OR–Urb.

Seattle, WA–Urb.

Minneapolis, MN–Urb.

Washington, DC–Urb.

San Jose, CA–Urb.

Philadelphia, PA–Urb.

Boston, MA–Urb.

San Jose, CA–Sub.

San Antonio, TX–Urb.

Houston, TX–Urb.

Indianapolis, IN–Urb.

Oakland, CA–Sub.

Minneapolis, MN–Sub.

Baltimore, MD–Urb.

Los Angeles, CA–Urb.

Detroit, MI–Urb.

Austin, TX–Urb.
Market Group Inventory 

Added

Increase in 

Inventory (by 

Units)

Market Group Inventory 

Added

Increase in 

Inventory (by 

Units)

Phoenix, AZ–Urb. 3653 37.8% San Jose, CA–Urb. 2723 10.6%

Nashville, TN–Urb. 5775 26.1% Minneapolis, MN–Urb. 3765 9.8%

Orlando, FL–Urb. 2865 22.7% Orlando, FL–Sub. 20876 9.4%

Cleveland, OH–Urb. 2524 20.6% Seattle, WA–Urb. 7751 8.7%

Tampa, FL–Urb. 3988 19.3% Phoenix, AZ–Sub. 30135 8.7%

Sacramento, CA–Urb. 2417 14.7% Houston, TX–Urb. 6422 8.0%

Austin, TX–Sub. 33528 14.6% Oakland, CA–Urb. 6521 7.5%

Kansas City, OK–Urb. 3542 14.2% Indianapolis, IN–Urb. 890 7.2%

Fort Worth, TX–Urb. 2721 13.9% Miami, FL–Sub. 16479 7.1%

Columbus, OH–Urb. 3210 13.8% Chicago, IL–Urb. 8923 6.9%

Salt Lake City, OH–Urb. 2556 13.4% Boston, MA–Urb. 7547 6.5%

Fort Lauderdale, FL–Urb. 5140 12.9% Tampa, FL–Sub. 13031 5.5%

Charlotte, NC–Urb. 2359 12.5% San Jose, CA–Sub. 7849 5.3%

Charlotte, NC–Sub. 21227 12.3% Miami, FL–Urb. 3528 5.3%

Jacksonville, FL–Sub. 13636 12.3% Jacksonville, FL–Urb. 381 5.2%

Denver, CO–Urb. 7233 11.9% Las Vegas, NV–Urb. 1021 5.1%

Nashville, TN–Sub. 14946 11.4% San Francisco, CA–Urb. 5025 4.0%

Washington, DC–Urb. 21875 11.3% Oakland, CA–Sub. 4479 3.7%

San Antonio, TX–Urb. 1719 11.3% Riverside, CA–Urb. 908 2.5%

Philadelphia, PA–Urb. 4386 11.1% Greensboro, NC–Urb. 349 2.0%

Portland, OR–Urb. 3070 11.0% San Francisco, CA–Sub. 1379 1.2%

Austin, TX–Urb. 2239 10.9% Cleveland, OH–Sub. 828 0.5%

3

Multifamily Economic and Market Commentary

... With More New Supply Expected

We believe that the amount of new supply delivered over the past few years has also impacted certain 

submarkets. According to construction data from Dodge & Data Analytics, over 1 million multifamily rental 

units are underway in the supply pipeline nationally as of early 2023, representing an increase of 75% from 

2019. With new units being delivered into these submarkets, coupled with softening demand across the 

multifamily sector beginning in the latter part of 2022, oversupply is of concern in certain submarkets. 

The locations with the highest percentage of inventory added tend to belong to urban submarkets that on 

average have increased their inventories by 8.9%. And while suburban submarkets had the most rent growth, 

they correspondingly had fewer units added on average, with an average increase of 5.3% since 2020. 

While metros such as San Francisco had few deliveries along with rent decreases, rent has also increased for 

those metros with few deliveries. The urban locations of Greensboro, Riverside, Jacksonville, and Miami have 

experienced less than 5.5% inventory growth, and all have had rent growth of over 35%.

Softening demand and possibly a near-term surplus of supply, have caused vacancies to increase in several 

submarkets. While some urban submarkets listed below have not seen vacancies shift as a result, the urban 

submarkets of both Sacramento and Phoenix experienced vacancy increases as inventories increased. 

Inventories in the Sacramento urban submarket increased by 14.7% while its vacancy rate increased by 365 

basis points to 8.5%. Inventories in the Phoenix urban submarket increased by 37.8%, while its vacancy rate 

increased by 250 basis points to 7.5%.

Change in Multifamily Inventory 4Q2019 – 4Q2022 – Select Metros

Source: RealPage, inc.
0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Suburban Urban

4

Multifamily Economic and Market Commentary

Vacancy Rates Across Submarket Types Diverged in 2020

Vacancy rates for urban submarkets were elevated compared to suburban submarkets before the pandemic, 

and, over the course of 2020, they spiked as high as 6.9% nationally, as seen in the chart below. However, like 

rent growth rates a couple of quarters later, urban vacancy rates started trending in the same direction as 

their suburban counterparts by Q3 2021. Although urban submarkets’ rent growth was lower than in 

suburban submarkets, as seen in the chart below, in Q3 2021 vacancy rates returned to below pre-pandemic 

levels, reflecting the increase in rental demand despite the bulk of deliveries occurring there.

Suburban submarkets’ vacancy levels did not rise as much as in urban submarkets, as seen in the chart 

below. Indeed, suburban submarket vacancies remained fairly stable during 2020. While urban submarkets 

had a rebound in 2021, suburban submarkets were already showing signs of increased demand. While 

vacancies dropped to 3.7% in urban markets in Q4 2021, vacancies in suburban markets dipped to a low of 

2.5% in that same period.

Vacancy Trends – Q4 2019-Q4 2022 by Submarket

Source: RealPage, Inc. 

Performance Likely to Further Align in 2023

Urban and suburban submarkets experienced significant shifts in fundamental demand and performance in 

the wake of the pandemic in 2020, with the effects lasting longer in some metros and submarkets than in 

others. Urban submarkets needed significantly more time to see a rebound, while suburban submarkets 

experienced unprecedented demand. Additionally, while the divergence of the trending in vacancy rates and 

asking rents ended during 2021, shifts to suburban submarkets have caused rents in suburban markets to 

expand tremendously. Although we expect the multifamily market in 2023 to see softer demand than in the 

past several years, we believe that the lagged urban submarket rebound will continue, especially as many 

employers are encouraging their workers to come into the office a few days a week and many renters appear 

to prefer living in more urban locations. We expect that the amenities and new supply that are being 

developed in the nation’s urban submarkets should continue to draw new renters (and keep existing ones), at 

least in the short-term, due to still-elevated interest rates and home prices keeping the option of 

homeownership a little further afield for many renters-by-choice. 
Multifamily Economic and Market Commentary

5

Sophia Kaleem, Associate

Tim Komosa, Senior Manager

Multifamily Economics and Strategic Research

April 2023

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic and 

Strategic Research (ESR) Group included in these materials should not be construed as 

indicating Fannie Mae’s business prospects or expected results, are based on a number of

assumptions, and are subject to change without notice. How this information affects Fannie 

Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, 

estimates, forecasts, and other views on information it considers reliable, it does not 

guarantee that the information provided in these materials is accurate, current, or suitable 

for any particular purpose. Changes in the assumptions or the information underlying these 

views could produce materially different results. The analyses, opinions, estimates, 

forecasts, and other views published by the ESR Group represent the views of that group as 

of the date indicated and do not necessarily represent the views of Fannie Mae or its 

management.