The multifamily real estate market in the Southeast is off to a powerful start in 2025, driven by a unique combination of robust demand and a significant slowdown in new supply. This dynamic is creating favorable conditions for sustained rent growth and strong investor returns throughout the region.

At Catalyst, we specialize in identifying actionable real estate opportunities in high-growth markets like the Southeast. Leveraging over 150 years of combined experience in multifamily development and investment, we provide our investors with strategies that capture maximum value in today’s evolving landscape.

In this article, we explore the latest data and market trends underpinning the multifamily supply slowdown and what it means for rent growth and investment prospects in the Southeast.

Record-Setting Demand Amid Slowing New Supply

According to RealPage, Q1 2025 recorded historic apartment absorption nationwide, with 138,000 units absorbed, the strongest first-quarter performance ever. Southeast markets led this surge, with Atlanta absorbing 7,612 units, Phoenix close behind at 7,461, and Dallas with 7,387.

While demand surges, new apartment deliveries are tapering off. The first quarter saw 116,000 new units delivered nationally, a clear sign that peak construction has passed. RealPage forecasts approximately 431,000 total apartment deliveries in 2025, marking a 26% decline from 2024.

What This Means for the Southeast

• Reduced Competition Among Landlords: Fewer new units coming online means less supply pressure, enabling landlords to maintain or increase rents.
• Rent Growth Opportunity: With limited new supply and strong demand fueled by population migration and job growth, rent appreciation in Southeast metros is expected to accelerate.
• Stabilized Occupancy Rates: Lower vacancies translate to more consistent income streams and improved property performance for investors.
  

Key Drivers Behind the Supply Slowdown

• Rising Construction Costs: Tariffs and inflation have increased the cost of labor and materials, causing developers to delay or scale back projects.
• Tighter Lending Environment: Stricter financing conditions limit the ability to fund new multifamily developments.
• Market Saturation Concerns: Some previously overbuilt markets are seeing a natural pullback in new supply to balance inventory.
• || Download Report: Why Multifamily Investment in the Southeast Makes Sense Today.

Rent Growth Is Back And Poised to Accelerate

After a two-year pause, rent growth returned in Q1 2025, rising nationally by 0.3%. Notably, 26 of the top 50 U.S. markets outperformed this average. The Southeast is well-positioned to benefit from this trend thanks to:

• Population Influx: Strong migration patterns continue to boost rental demand in cities like Atlanta, Tampa, and Charlotte.
• High Mortgage Rates: Elevated borrowing costs keep many potential homebuyers renting longer.
• Economic Resilience: Diverse industries and steady job creation in the Southeast support sustained housing needs.

Why Multifamily Investment in the Southeast Makes Sense in 2025

• Robust Fundamentals: Demand growth, limited supply, and stabilizing rents form a trifecta for positive returns.
• Attractive Yield Potential: With rents rising and occupancy high, cash flow prospects remain strong.
• Long-Term Growth: Continued population and economic expansion signal enduring multifamily demand.

How Catalyst Captures Value in This Market

At Catalyst, our integrated approach leverages deep local market expertise, rigorous deal flow analysis, and advanced risk assessment. We focus on:

• Identifying below-market multifamily opportunities before peak rent growth
• Executing precise value-creation strategies to enhance asset performance
• Building institutional-quality projects tailored to Southeast market dynamics

Our seasoned team combines entrepreneurial vision with proven execution to deliver superior investor returns.

Conclusion

The multifamily supply slowdown is reshaping the Southeast’s rental housing market, setting the stage for meaningful rent growth and attractive investment opportunities. For investors seeking stability and upside in 2025, Southeast multifamily remains a compelling sector.

Ready to capitalize on these trends with a trusted partner?
Connect with Catalysts today and discover how we unlock the full potential of multifamily investments in the Southeast.