Occupancy Growth Muted in Early Q2
Economic headlines
The U.S. labor market bounced back in March to reverse February’s losses. While the headline was positive, the U.S. has not posted consecutive months of job gains since April and May 2025. A bad month of growth has followed a good one the past year, and that was before the potential economic impact of the conflict in Iran.
- Headline Growth: The economy added 178,000 jobs in March, roughly three times higher than economists predicted. Average hourly earnings were up 3.5% from the prior year, still in a solid range to support rent growth for areas where multifamily demand and supply are in balance.
- Industry Divergence: Healthcare added 76,000 jobs, and about half of it was from physicians returning to work after striking. Leisure and hospitality added 44,000 jobs and construction added 26,000. The federal government (-18,000) and financial activities (-15,000) lost jobs.
- Shrinking Workforce: The unemployment rate ticked down to 4.3%, but largely because the labor force shrank by 400,000 people. The labor-force participation rate fell to 61.9%, its lowest level since 1977 when excluding the pandemic era.
Multifamily Operational Results
While the monthly jobs total was an optimal range, only 235,000 jobs were added in the U.S. in the last year on a non-seasonally adjusted basis. That total was far short of what’s needed to absorb the more than 1.4 million total housing units that were delivered during the same period. It is likely the key reason we are seeing slowing leasing velocity which is causing occupancy to trail last year’s rate.
The average U.S. occupancy rate was 93.99%, down 59 basis points from the prior year. The leased percentage was 95.67%, down 130 basis points from last year. Both metrics have displayed minimal growth since the beginning of the year rather than the typical seasonal increase.
The average number of leases signed was 2.1 per property last week. It was down by 0.8 per week compared to a year ago, which contributed to lower occupancy and leased percentages.
Annual net effective rent growth for new leases has been close to flat in recent weeks, and it was at 0.1% in the latest report. RevPAU, which combines the change in rents and occupancy, was down 0.6% compared to a year ago.
| MSA | Annual Effective Rent Growth | Occupancy Rate |
| Atlanta, GA | -3.9% | 93.5% |
| Austin, TX | -5.6% | 91.7% |
| Dallas, TX | -1.7% | 92.8% |
| Denver, CO | -6.3% | 93.0% |
| Houston, TX | -4.9% | 92.6% |
| Las Vegas, NV | -5.1% | 94.1% |
| Miami, FL | -1.9% | 94.7% |
| Phoenix, AZ | -5.9% | 93.4% |
| San Francisco, CA | 4.3% | 96.4% |
| Seattle, WA | -1.7% | 94.9% |
| Washington, DC | 1.7% | 94.5% |
| U.S. | 0.1% | 94.0% |
Source: Radix Data as of 04/05/2026
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