Q4 net absorption totaled 55,600 units, far better than expected given normally weak leasing in fourth quarters and during recessions. The overall vacancy rate rose only 10 basis points (bps) to 4.5% in Q4 and was up by 50 bps year-over-year.
A high level of new deliveries far outpaced demand in Q4. Average rent declined 1.6% in the quarter to $1,666 per month. Year-over-year, average rent dropped 4.2%.
Certain multifamily segments performed better than average in Q4, including suburban submarkets, smaller markets, the Midwest, Mountain West and Southeast regions and Class B and C assets.
Overall multifamily fundamentals should stabilize by Q2 2021. Steady market recovery is expected through the second half of 2021.