Berkadia’s Beyond Insight’s whitepaper: U.S. Apartment Concessions: Upward Trend, Downward Forecast reveals a fascinating shift in the apartment rental market. With increased competition from new housing, more than 20% of U.S. apartment units offered concessions in Q2 2024. However, this trend is set to change as market fundamentals strengthen. Historically, concessions have spiked during economic downturns but dropped during periods of strong demand. Looking ahead, the share of units offering concessions is expected to decrease as occupancy rates rise, driven by strong leasing activity and a competitive homeownership landscape.

Dive in to discover the detailed trends and forecasts shaping the future of apartment concessions. 

Key Takeaways:

• Recessions have historically driven an increase in apartment operators offering concessions, a trend observed following the pandemic.
• This resulted in higher concession levels and more units offering concessions, though the impact was less significant than during the Great Recession.
• A slowdown in new deliveries and a projected rise in net absorption suggest a positive near-term outlook for apartment concession trends, as occupancy rates and concession levels are closely linked.