Raleigh–Durham, NC

Market Update

The Raleigh-Durham market continues to exhibit strong demographic trends, with a population of approximately 1.56 million, reflecting a year-over-year growth rate of 3.5%. This growth is supported by a net migration of over 20,800 individuals, contributing to a diverse and expanding labor pool. The median household income stands at $102,144, while the unemployment rate is relatively low at 3.6%. With an employment base of around 840,868 and an average weekly wage of $1,509, the economic fundamentals underpinning housing demand remain robust. Notably, the renter share is approximately 35%, indicating a significant portion of the population is engaged in the rental market.

In terms of multifamily fundamentals, the median gross rent is currently $1,674, with year-over-year rent growth recorded at 1.6%. The HUD Fair Market Rents for a two-bedroom unit are benchmarked at $1,771, which is slightly below the market rent levels, suggesting a degree of affordability pressure for renters. The modest rent growth indicates a stable but cautious momentum in the multifamily sector, as the market adjusts to economic conditions and demographic changes.

Capital markets for multifamily properties in Raleigh-Durham show a cap rate of 6.67%, which is about 37 basis points tighter than the national median of 7.04%. Over the trailing 24 months, there have been 113 transactions with a total volume of approximately $247.6 million, resulting in a median price per unit of $260,750, which is about 30% higher than the national benchmark. This data reflects a competitive investment landscape, though the modest rent growth suggests that investors should remain vigilant regarding market dynamics. According to recent reports, the multifamily sector is expected to continue facing challenges related to affordability, which could impact future investment strategies.