ATLANTA—There's no overbuilding on the multifamily front in Atlanta—at least not yet. The multifamily sector is still performing strong even with new developments that are at least partially satiating the hunger for apartments, especially in Atlanta.

A recent CBRE Research report reveals that over the past several quarters, the national demographic of those seeking multifamily rental opportunities has diversified, pushing the overall nationwide apartment vacancy to 4.8% and the home ownership rate to 63.4%--its lowest level since 1967.

The CBRE report also finds that national rent growth has reached its strongest year-over-year gain in nine years. That marks the highest historical multifamily four-quarter investment by the end of the first quarter in 2015.

Drilling down into Atlanta, multifamily rent appreciation is gaining momentum and extends across all submarkets. That brings Atlanta to a record year-over-year rent growth rate of 7.8%. Meanwhile, the overall multifamily vacancy rate has steadily declined—from its 11% high six years ago, to 6%, where it has remained for the past two quarters.

“We remain bullish for a few reasons, including the demographics of renters and Atlanta's job growth,” Shea Campbell, first vice president with CBRE's Multifamily Investment Properties group, tells GlobeSt.com. “Atlanta has seen an increase in employment for five consecutive years and Atlanta's job growth has been above the national average for the same time period. A recent economist predicts that our city will add 100,000-120,000 jobs each year for the next three years, drawing in more people and in turn more renters." 

The national home ownership rate dropped to a 48-year low in the second quarter of 2015, according to the US Census Bureau. Within every age ranking, except 65-plus, homeownership has declined over the past 20 years.

This reality creates an even stronger demand for multifamily development, which CBRE expects will continue for the next 20 years. The firm predicts Atlanta multifamily will fare well, as it has the second-lowest rent among the top 10 markets and the highest vacancy decrease over the past 12 months among the top 20 markets.

"The second component we're seeing is on a national scale, but certainly true for Atlanta—more people are choosing to rent and are renting for a longer period of time,” Campbell says. “Home ownership currently stands at 63.4%, the lowest level since 1967.  Baby Boomers and empty nesters are flocking from their homes in the suburbs and opting to rent high-end units within well-amenitized communities.”

The trend toward urbanization and higher-density living in Atlanta seems likely to remain or accelerate as more residents chose to be near major in-town employment and entertainment nodes from which daily commutes via MARTA, bicycle, walking or short drives are viable. Added amenities and walkability in Buckhead, Midtown, Old Fourth Ward, Inman Park and along the Atlanta BeltLine have made these submarkets especially desirable, CBRE reports.

Meanwhile, job growth and a reinvigorated demand for stylish new multifamily product in Atlanta have bolstered the city's multifamily leasing momentum while simultaneously pushing rents to record levels. With more than 95,500 jobs added over the past four quarters, Atlanta is expected to have the fourth highest job growth nationwide over the next two years.

“Millennials, over 80 million strong and nearly double the size of the previous generation, are also having a tremendous impact on the apartment sector as they are postponing home ownership,' says Capbell. “Considering the diverse, growing demographic of renters, the multifamily sector is poised for strong growth.”

Investors are noticing. Multifamily sales volume in Atlanta has spiked in the past three quarters, up 53.6% over the same period a year earlier. Atlanta achieved the highest overall return among the major apartment markets. If new construction activity remains within a healthy range and oversupply is avoided, CBRE concludes, Atlanta will see continued rental rate appreciation and below-trend vacancy rates over the near term.