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Slowing Job Growth Leads to Temporary Pause in Apartment Demand
Amid slowing employment growth and declining workforce participation, the number of young adults living with family has risen to a record high, surpassing even pandemic-era levels. That has made a noticeable impact on multifamily absorption, albeit a temporary one, Marcus & Millichap says in a new Research Brief.
Net absorption in the first half of 2025 averaged 191,000 apartments per quarter, before slowing to 35,000 units in the third quarter, while 40,000 doors were relinquished to end the year, according to Marcus & Millichap. That coincides with a 140-basis-point drop in labor force participation among 20- to 24-year-olds.
“History, nevertheless, indicates that when young adults move in with family, it is usually temporary,” the Research Brief states. “In the two years following the pandemic, the number of young adults living at home declined by nearly two million, contributing to the net absorption of about 665,000 units in 2021. As more young adults begin to find career-track jobs, apartment demand momentum could climb quickly.”
- ◦Economy
