Multifamily National Report – January 2019

Year-over-year growth has increased by 10 basis points to 3.3 percent, according to a Yardi Matrix survey of 127 markets, matching the highest rent growth since November 2016.

The multifamily industry continues to perform strongly into 2019. Although rents did not increase from the $1,420 recorded in January, year-over-year growth has risen by 10 basis points to 3.3 percent, according to a Yardi Matrix survey of 127 markets. This matches the highest rent growth since November 2016. 

In terms of market performance, once again Las Vegas led the pack, with a rent growth of 7.9 percent. Following that was Phoenix at 6.5 percent and Atlanta with a rise of 5.9 percent. The West Coast markets continue to show strong performance, with five out of the top 10 markets being located in California—the Inland Empire, San Jose, Sacramento, Los Angeles and San Francisco. Despite California’s continued growth, rents increased by 2 percent or more in all but three of the top 30 metros last month. 

When it comes to Renter by Necessity versus Lifestyle rent growth, the gap amongst the two is contracting, according to the report. In January, RBN rent growth was at 3.8 percent, 70 basis points above Lifestyle. However, this was the first month where the spread was under 1 percent since 2014. 

The report touched on points from National Multifamily Housing Council’s 2019 Apartment Strategies Outlook Conference, which featured commentary from various panelists on the state of the market for the upcoming year. Major takeaways included lower yield expectations among investors, projected modest appreciation gains in coming years, how regulatory leadership could change the way Fannie Mae and Freddie Mac operate in 2020, and how the ability to develop affordable housing continues to be an issue, with panelist airing their frustrations with inconsistent enforcement of regulations and a higher cost of building. 

To read the full report, visit the Yardi Matrix website.