Memphis, TN

Market Update

Memphis has experienced a modest population growth of 0.16% year-over-year, bringing the total to approximately 1.34 million residents as of the end of 2026. This growth follows a slight decline in 2022, indicating a recovery trend. The city has seen a net migration of about 28,614 individuals, contributing to the overall population increase. The median household income stands at $68,124, while the unemployment rate is reported at 5.6%. With 40.4% of the population renting, these demographic factors are critical demand drivers for housing in the area.

In terms of multifamily fundamentals, the median gross rent remains stable at $1,330, with year-over-year rent growth recorded at 3.1%. This growth is slightly below the national median of 3.5%, suggesting a competitive but affordable rental market. The HUD Fair Market Rents for a two-bedroom unit are benchmarked at $1,771, which is notably higher than the median gross rent, indicating a potential affordability challenge for renters. The asking rents for various unit types, including studios at $1,105 and three-bedroom units at $1,781, reflect the ongoing demand for multifamily housing.

Capital markets in Memphis show multifamily cap rates at 8.15%, which is approximately 111 basis points higher than the national median of 7.04%. Over the trailing 24 months, there have been 209 transactions with a total volume of about $263 million, resulting in a median price per unit of $155,000. This price point is about 22% lower than the national median, suggesting a more accessible investment landscape. The current metrics indicate a stable market, though the slight decline in rent growth compared to national averages may warrant careful consideration in underwriting strategies.