According to the Census Bureau, approximately 620,000 multifamily units are under construction as of April. This is the highest level of new construction since October 1974.  This growth is a 9% uptick year over year and a 23% increase from two years ago.

The steady climb of employment growth has been the main driver of strong multifamily market fundamentals, which led to the strong levels of annual revenue growth recorded from 2010 to 2015. At that point, however, oversupply placed more pressure on rents, dropping growth down to 3.2% in 2016, reports Zelman & Associates in The Z Report.  What's worse is that growth is expected to drop to 1.6% for 2017 and 1.1% in 2018, according to Zelman.

This sentiment is echoed by REIS.   The average U.S. apartment asking rent grew 0.4% in the first quarter of 2017, up to $1,315, and by 3.3% on a year-over-year (YOY) basis since the first quarter of 2016, according to Reis’1Q 2017 Apartment Sector Preliminary Trends Release.

Effective rents, meanwhile, have grown 0.3% in the past quarter and 3.1% YOY. Reis’ Barbara Denham attributes the growing divide between asking and effective rents to the increasing use of concessions to attract and secure occupants.

Considering various local markets, Zelman reports 5.4% revenue growth in the Inland Empire, Calif., 5.1% in Seattle and 4.1% in Las Vegas. Alternatively, a 4.5% decline in revenue growth is expected in Houston, with a 1.4% drop in San Francisco and a 1.1% drop in Austin, Texas.