In the context of a projected mild recession and high interest rates, Detroit’s multifamily performance was a mixed bag during the first half of the year. After some stagnation during the first quarter, rent development recovered to 0.5 percent on a trailing three-month basis through June, to an average of $1,248. Growth was 10 basis points above the national rate. Economic uncertainty contributed to less movement and an 80-basis-point year-over-year drop in the nationwide occupancy rate in stabilized assets, to 95.0 percent as of June. In Detroit, the rate dropped 150 basis points, to 94.8 percent.
The metro’s unemployment rate reached 3.6 percent as of May, according to preliminary data from the Bureau of Labor Statistics. In the 12-month period ending in April, Detroit added 13,900 jobs—a 1.3 percent expansion of the labor pool and 160 basis points behind the national rate. Education and health services led growth, with 10,600 jobs added, or a 3.5 percent expansion. Despite experiencing a slower rate of growth than what was recorded last year, Detroit’s employment growth is expected to improve between 2023 and 2027, a study from the University of Michigan shows.
Development activity slowed down in the metro, as completions totaled 894 units during the first half of the year, down 33.6 percent year-over-year. A total of 3,885 units were under construction and an additional 27,000 units in the planning and permitting stages.
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