Houston and Chicago top the apartment rankings

Across the 17 metros we cover, most will see higher vacancy over the next year or so due to a surge in completions. Atlanta and Houston will be the key exceptions. There new construction has plummeted in response to falling apartment values and higher financing costs, which will limit vacancy rises and keep rents on an upwards trajectory. As a result, those metros will see the strongest cumulative rise in capital values over the forecast. Conversely, markets with much larger supply pipelines like D.C. and Miami will trail, with vacancy in those metros set to climb above 8% and remain there over the forecast, which will undermine rental growth. D.C. and Seattle will perform particularly poorly over the next five years, with capital values in both metros set to drop a further 17%. That will translate into average total returns of under 2% p.a. in Seattle and D.C. over the forecast period. Conversely, Houston will show strongest total returns of 8% p.a. over 2024-28, closely followed by Chicago and Boston thanks to decent capital value appreciation and solid income returns of 5% p.a.