2021 Rent Growth

A year-over-year comparison of all asset classes across 30 major metros, provided monthly by Yardi Matrix.
National average includes 127 markets tracked by Matrix, not just the 30 metros listed above.
Source: Yardi Matrix June 2021 Monthly Report

Multifamily rent growth has reached unprecedented levels according to Yardi Matrix’s June survey. Asking rents in June increased 6.3 percent over the previous 12 months, to an average of $1,482, the largest year-over-year increase in the history of the dataset. Rents increased nationally by 1.6 percent over the previous month. All of the top 30 markets reported positive month-over-month growth for the third month in a row, and 27 of those also reported positive year-over-year growth. For the first time since 2011, Lifestyle rents (7.2 percent) grew faster than Renter-by-Necessity rents (5.3 percent) on a year over year basis.

Rent growth was bolstered by migration to the Southeast and Southwest markets. Phoenix experienced 17.0 percent rent growth over the last 12 months. Tampa and the Inland Empire both increased 15.1 percent over the same period. Also notable were Las Vegas and Atlanta, which grew by 14.6 and 13.3 percent. These markets were previously seen as lower cost alternatives to gateway metros. According to Yardi Matrix. this level of growth is not sustainable long-term, but the expectation is that above-average growth in these markets will continue for several months.

Double digit rent increases in markets in the Southeast and Southwest mark that their affordability has begun to decline. Phoenix rents rose by an average of $200 through the past 12 months. Much of the migration into the metro came from higher cost locations where residents were used to paying higher rents. This has put more strain on longtime residents causing, them to downsize or find lower cost locations to live.

On a month-over-month basis, Tampa and Phoenix showed the strongest rent growth, both at 2.5 percent. Urban cores showed strong signs of rebounding, with New York and Seattle reporting 1.9 percent monthly rent growth. Chicago and Washington, D.C., followed, at 1.7 percent. Month-over-month Lifestyle rent growth (2.2 percent) is also outpacing the Renter-by-Necessity segment (1.2 percent).

The single-family rental market also showed strong growth. Rents in the sector were up 11.1 percent year-over-year. All of the top 30 metros recorded positive year-over-year rent growth, with 17 posting growth rates in double digits. Markets with the largest rent growth were Tampa (31.3 percent), Phoenix (23.9 percent) and Miami (23.6 percent). Yardi Matrix believes that there is strong demand in the sector, as people are looking for more space. Occupancy was up 1.9 percent in May on a year-over-year basis. 24 of the top 30 metros had flat or increasing occupancy over the same period.

—Posted on Jul. 27, 2021


National average includes 127 markets tracked by Matrix, not just the 30 metros listed above. Source: Yardi Matrix May 2021 Monthly Report
National average includes 127 markets tracked by Matrix, not just the 30 metros listed above.
Source: Yardi Matrix May 2021 Monthly Report

Positive momentum continued across the national multifamily market, with rent growth back to pre-pandemic levels, up 2.5 percent year-over-year in May, to $1,428. According to Yardi Matrix’s May survey, of the top 30 markets, 22 had positive year-over-year growth rates. On a month-over-month basis, the national average rent rose 0.8 percent, posting the largest increase since June 2015, while all top 30 metros had positive growth, and 90 percent registered gains of 0.5 percent or more.

The best performing metros on a year-over-year basis were the Inland Empire (10.2 percent, the highest rate in the metro’s history), Phoenix (9.6 percent) and Sacramento (8.3 percent). Of all gateway markets, Miami posted the strongest gains, up 6.0 percent. At the opposite end are San Jose (-9.0 percent), New York (-8.8 percent) and San Francisco (-6.7 percent).

All gateway markets showed signs of recovery—New York led all 30 top metros with an average rent growth of 3.4 percent on a month-over-month basis.  Lifestyle rents led growth there, up 4.8 percent. The rebound in the metro is likely driven by the financial sector, with the banking industry mandating that workers return to the office this summer. Slower performances were recorded in Seattle (0.2 percent MoM) and San Francisco (0.3 percent MoM). The lag is attributed to the large concentration of tech workers that are more likely to continue working on a hybrid or fully remote schedule.

During the four months of 2021, almost 120,000 units—0.8% of stock—were absorbed nationally, pointing to one of the best years since the 2008 recession. Dallas (8,200 units absorbed), Miami (5,700), Atlanta (5,400) and Phoenix (4,600) occupied top positions by the number of units absorbed. Absorption based on percentage of stock was highest in Nashville (2.1 percent of stock), Miami, Charlotte and Chicago (all 1.9 percent). At the bottom of the top 30 metros stood the Inland Empire (0.3 percent of stock, or 531 units year-to-date) and Sacramento (0.2 percent of stock, or 209 units). The two metros are relatively affordable compared to other California markets, but robust year-over-year rent increases seem to narrow the gap in the cost of living.

May marked the launch of Yardi Matrix’s data tracking single-family rentals, which comprises more than 90,000 units in 700 communities across the U.S. Rents in the asset class rose by 7.3 percent in May on a year-over-year basis, or by $14, to $1,761 with the Inland Empire (18.3 percent), Phoenix (15.3 percent) and Denver (13.5 percent) topping the list for year-over-year growth. Occupancy marked a 1.5 percent increase in the 12 months ending in April, to 96.6 percent.

—Posted on Jun. 29, 2021


National average includes 127 markets tracked by Matrix, not just the 30 metros listed above. Source: Yardi Matrix April 2021 Monthly Report
National average includes 127 markets tracked by Matrix, not just the 30 metros listed above.
Source: Yardi Matrix April 2021 Monthly Report

The national multifamily market registered the best performance in rent growth since the onset of the pandemic, according to Yardi Matrix’s April survey. Rents rose 1.6 percent to $1,417 on a year-over-year basis in April, which marks a $10 increase in overall rents, an amount last recorded in June 2015. For the first time since the beginning of the health crisis, all top 30 markets had positive month-over-month rent growth, with 24 of them posting rent hikes greater than 0.5 percent. On a year-over-year basis, of the 134 markets surveyed, 117 posted positive rent growth.

Rent growth was positive in all gateway markets on a month-over-month basis, and the rebound in gateway market rents is seen as the trustworthy sign of economic recovery—Miami (1.0 percent), Chicago (0.9 percent), Boston & San Francisco (0.8 percent), New York (0.6 percent), Washington, D.C., (0.2 percent) and Los Angeles (0.1 percent). On a trailing three-month basis, Miami posted a 0.8 percent increase, followed by Chicago (0.5 percent) and Boston (0.4 percent). Rent growth in Washington, D.C. (0.2 percent), New York, San Francisco and Seattle (all 0.1 percent) is expected to strengthen as the summer approaches. On a year-over-year basis, New York (-12.6 percent), San Jose (-10.8 percent) and San Francisco (-7.7 percent) remain at the bottom.

Leading markets for rent growth for the past few years—The Inland Empire (9.4 percent), Sacramento (8.4%) and Phoenix (8.1%)—posted extremely low rates five years ago; over this five-year period, rents hiked by 31 percent in the Inland Empire and by 34 percent in Sacramento and Phoenix. Meanwhile, on a national level, rents rose by 12 percent. Of the six markets that posted negative year-over-year rent growth, Austin (-0.1 percent) had strong month-over-month gains, which will likely turn rent growth positive next month.

The occupancy rate also improved in gateway markets, but properties in the downtown urban cores will likely face a recovery period of up to three years. According to a study of the Yardi Matrix database, one of every 14 multifamily properties has recorded occupancy rate declines of 5 percent or more over the last 12 months. The most significant occupancy drops were in New York, San Jose and Los Angeles. Expected new supply raises some concerns—when coupled with possible scarce demand, it could lengthen the recovery. In San Jose, stock is anticipated to expand by 2.0 percent in 2021 and by 4.2 percent in 2022. 

—Posted on May 25, 2021


Year-over-year, all asset classes

National average includes 127 markets tracked by Matrix, not just the 30 metros listed above. Source: Yardi Matrix March 2021 Monthly Report
National average includes 127 markets tracked by Matrix, not just the 30 metros listed above.
Source: Yardi Matrix March 2021 Monthly Report

The U.S. multifamily market marked a turning point in March, with multifamily rents rising 0.6 percent year-over-year, or up $6 to $1,407, according to Yardi Matrix’s survey. On a quarter-over-quarter basis, the U.S. average rent appreciated by 0.8 percent, posting one of the strongest quarters in a few years. On a month-over-month basis, rents increased by 0.4 percent, up 20 basis points from February. Of the 134 markets surveyed, 114 had flat or positive year-over-year rent growth. Of the top 30 metros, 19 had flat or positive year-over-year rent growth, and 26 posted flat or positive month-over-month rent performance.

Lower-cost metros in the West continued on an upward trend, sustained by strong demand for housing—the Inland Empire (8.3 percent) Sacramento (7.3 percent) and Phoenix (6.9 percent) led all markets on a year-over-year basis. Limited new supply and robust migration boosted the average rent in Tampa (5.0 percent) and Atlanta (4.7 percent), where inventories expanded by 2.3 percent and 2.5 percent in the 12 months ending in March.

Rents remained on a downward trend in the metros most impacted by remote work and out-migration—New York (-13.6 percent YoY) and San Jose (-12.0 percent)—but even here there are signs of bottoming out. San Jose marked a 0.9 percent increase on a month-over-month basis, pointing to a possible turnaround.

Stock expansion is a big factor in the recovery of many metros. The most completions as a percentage of stock over the last 12 months ending in March were registered in Austin (4.4 percent YoY), Raleigh (3.9 percent), Twin Cities (3.9 percent) and Denver (3.8 percent). Rents appreciated by 0.4 percent and 0.1 percent in the Twin Cities and Denver on a year-over-year basis. Most gateway markets reported limited completions but have robust construction pipelines: Miami led with 14.6 percent of existing stock under construction, followed by San Francisco (8.2 percent) and Los Angeles (7.8 percent).

In Raleigh, the robust stock expansion caused rents to decline 0.9 percent month-over-month, but it could be just a one-month dip as the metro is sustained by strong economic fundamentals. On a year-over-year basis, the average marked an uptick of 0.5 percent. In Austin, inventory additions kept rent growth struggling since the onset of the pandemic, but in March, rents appreciated by 0.9 percent on a month-over-month basis, posting the strongest performance over the past year.

—Posted on Apr. 26, 2021


Year-over-year, all asset classes

National average includes 127 markets tracked by Matrix, not just the 30 metros listed above. Source: Yardi Matrix February 2021 Monthly Report
National average includes 127 markets tracked by Matrix, not just the 30 metros listed above.
Source: Yardi Matrix February 2021 Monthly Report

The decline of multifamily rents continued on a softening trend, as signs of recovery become clearer according to Yardi Matrix’s monthly survey of 133 markets. Even though the national rent growth was still negative in February—with year-over-year rents down 0.1 percent—on a month-over-month basis, the average rent appreciated by 20 basis points, up $3 to $1,399. If market conditions hold, February may well be the last month we see a national decline in rents. On a year-over-year basis, 16 of the top 30 markets remained flat or marked negative rent performance, posting a progressively moderating rate. On a month-over-month basis, 111 of the 133 surveyed markets had positive rent growth.

Lower-cost markets continued to outperform gateway markets—rents in New York, San Jose and San Francisco declined by 9.9 percent on a year-over-year basis, but even here month-over-month declines have moderated, hovering between -0.4 and -0.8 percent. Seattle (-7.7 percent YoY, -0.7 percent MoM) continued to struggle. Declines in gateway markets affected both Lifestyle and Renter-by-Necessity assets.

The Inland Empire (7.6 percent) and Sacramento (6.4 percent) maintained top positions for rent growth on a year-over-year basis through February. The two were also in the top three for occupancy growth, up 2.2 percent and 1.2 percent on a year-over-year basis as of January. Performance was sustained by strong migration and limited supply, of just 1.6 percent of total stock in the 12-months  ending in February. Midwestern markets like Indianapolis (rents up 3.6 percent year-over-year) and Kansas City (up 2.3 percent) posted favorable performance on a year-over-year basis thanks to their affordability and limited new supply. On a month-over-month basis, of the top 30 markets, 23 had positive rent growth, with Phoenix (0.9 percent), Miami (0.8 percent) and Tampa (0.7 percent) posting the best rent gains.

The passage of a COVID relief bill in December 2020 boosted economic activity, and the recent $1.9 trillion stimulus bill is anticipated to galvanize the economy further, but the issue of high inflation is lurking. With spring marking the peak of leasing season, Yardi Matrix expects month-over-month rents to appreciate and even accelerate as the economy recovers.

—Posted on Mar. 24, 2021


Year-over-year, all asset classes

National average includes 127 markets tracked by Matrix, not just the 30 metros listed above. Source: Yardi Matrix January 2021 Monthly Report
National average includes 127 markets tracked by Matrix, not just the 30 metros listed above.
Source: Yardi Matrix January 2021 Monthly Report

The decline of multifamily rents showed signs of softening, according to Yardi Matrix’s monthly report of 130 markets. Rents dropped 0.2 percent in January on a year-over-year basis, while on a month-over-month basis, the average rent marked a 20 basis-point rise, or an increase of $3 to $1,392. Although the average national rent is improving, of the top 30 markets, 16 posted declines.

In some gateway markets, rents continued their descent, including New York (down 12.2 percent year-over-year), San Francisco (-9.8 percent), Boston (-3.8 percent) and Los Angeles (-3.0 percent); other gateway markets show signs of bottoming out, posting increases in the month-over-month rents, such as San Jose, where rents improved 0.9 percent, but were down 13.0 percent year-over-year. The best performers continued to be the Inland Empire (up 7.4 percent year-over-year), Sacramento (up 6.3 percent) and Indianapolis (up 4.5 percent), due to their location near dense and high-cost markets.

Rents in the Lifestyle segment rose by 0.1 percent on a month-over-month basis in January, marking the first positive movement in the segment since February 2020. Meanwhile, Renter-by-Necessity rents continued rising, up by 0.3 percent.

Job loss or growth has not been directly proportional with declines or gains in rents and occupancy across metros, instead, a correlation to migration trends and living costs has emerged. Markets with the highest percentage of jobs in “at-risk employment sectors”—which included Las Vegas and some of the Florida markets—withstood the pandemic’s impacts aided by robust in-migration from higher-cost states like California and New York. Metros with the smallest percentage of jobs in at-risk employment sectors, like New York and Northern New Jersey, marked steep rent declines.

—Posted on Feb. 26, 2021