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Here’s the Most Unexpected Twist of the Apartment Sector in 2023

The surge in apartment construction is softening the Class B market more than any other asset class.

By Jay Parsons, Senior Vice President and Chief Economist for RealPage | October 16, 2023 at 04:00 AM

For me, this is the biggest surprise of the U.S. apartment market in 2023: The surge in apartment construction is softening the Class B market more than any other asset class. In high-supply submarkets, Class B rents fell more than twice as much as Class A over the past year. Yet in submarkets with no new supply, Class B performed right in line with Class A.

It’s all about supply. The more supply in a submarket, the more likely rents are falling in ALL asset classes. But surprisingly, the biggest impact is to Class B, according to RealPage data.

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