2018 Rent Growth

Year-over-year, all asset classes

The multifamily market continues to perform strongly, with an increase in national rent growth of 31 percent over the last eight years. According to a survey of 127 markets by Yardi Matrix, annual rent growth has risen at least 2.9 percent every year and has surpassed 3 percent in six of the last eight years. December year-over-year rent growth was at 3.2 percent, but rents remained at $1,419 from the previous month. 

Although this positive performance brings worry that it may not last for long, multifamily stands to prove that wrong, due to the strong demand within the sector. Over the past eight years, 8.9 million households have formed in the U.S., an average of 1.1 million per year. With this in mind, the number of people in the prime renter-age is expected to continue growing over the next few years. In addition, job growth also remains positive, as well as other social factors that inhibit home ownership—student loan debt, downsizing Baby Boomers, remaining renters longer—will maintain the demand for rental housing. 

—Posted on Jan. 11, 2019

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Year-over-year, all asset classes

Multifamily rents once again declined for the month of November, marking the third monthly decrease in a row. Rents dropped $2 to $1,419, down $3 from its peak of $1,422 in September. Year-over-year growth has lessened by 10 basis points to 3.1 percent, according to a survey of 127 markets by Yardi Matrix. 

Although there is a continued decrease into the fourth quarter, this is typical for the market during this part of the year. Demand still is strong, with household formation running at 1.5 million per year, helping to fill the 300,000 units of new supply. Occupancy remains stable at 95 percent or higher over the last two years.

—Posted on Dec. 14, 2018

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Year-over-year, all asset classes

Multifamily rents have dropped by $1 to $1,420 in October, marking the second month of decline in a row. According to a survey of 127 markets by Yardi Matrix, rent growth remained unchanged year-over-year at 3.3 percent, although this shows an increase of more than 100 basis points over the last 12 months. 

In terms of the top 30 market performers, Orlando has been pushed down from it’s top spot, dropping to third place when it comes to rent growth. Las Vegas has secured the new position, with a 7.4 percent increase due to a limited new supply and strong demand combined to boost rents. Following that was Phoenix (7.1%), where demand is fueled by rapid employment growth and domestic migration. Rounding out the top five was Orlando with 6.4 percent growth, Inland Empire with 5.5 percent and Atlanta with 5 percent. 

—Posted on Nov. 12, 2018

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Year-over-year, all asset classes

Following a record high rent increase of $2 in August, multifamily rents for September have dropped $1 to $1,412. With year-over-year growth unchanged at 3 percent, this marks the first time since January that rents have not increased. Despite this decrease, the market outlook is positive, with the average national rent growing to $42 over the last three quarters, exceeding expectations for the sector. 

A major concern for the market was how occupancy rates would hold up against the surplus of new supply. Rates slipped 100 basis points from 2016 to 2017, shortly after deliveries surpassed 300,000 units per year starting in 2015. Following that, rates hit 95 percent in late 2017 and early 2018, but are slowly climbing back up, reaching 95.4 percent currently.

—Posted on Oct. 11, 2018

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Year-over-year, all asset classes

Multifamily rents for the year have hit a record high for the seventh consecutive month, up $2 to $1,412 in August. This marks an increase of 3.1 percent year-over-year, up 10 basis points from July. According to a Yardi Matrix survey of 127 markets, growth continues to be strongest in metros in the South and West, which are among the top nine best performers. 

Much like last month, Orlando once again leads the top 30 metros in year-over-year growth, this month increasing 6.7 percent. Next is Las Vegas, up 5.7 percent, followed by the Inland Empire (5.4 percent), Phoenix (5.3 percent) and Tampa (4.8 percent). 

—Posted on Sep. 13, 2018

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Year-over-year, all asset classes

Rents for the month of July increased by $3 to an all-time high of $1,409, according to a Yardi Matrix survey of 127 markets. Year-over-year, rents have risen by 2.8 percent, but decreased 10 basis points since June. The summer has continued to be positive for the multifamily market, with rents increasing $41, or 3 percent year-to-date. The occupancy rate has increased by 20 basis points, year-to-date, with several metros improving rates due to new supply. Occupancy changes continue to be negative in most of the major markets, but the rate of decline is slowing, while overall occupancy remains within the normal range. 

—Posted on Aug. 15, 2018

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Year-over-year, all asset classes

The first half of the year for the multifamily market was strong, with rents rising $12 in June, to the highest amount of $1,405 for the year. This marks a 20-basis-point increase over the past month. Despite consistent supply growth and the lack of affordability in several major markets, rents increased by $29 in quarter two, up 2.1 percent for the quarter and 2.6 percent for the first half. The quarterly increase marks the highest since rents grew 2.3 percent in the second quarter of 2015. As for the first half, that record was beaten in 2016 with a rise of 2.9 percent. 

—Posted on July 11, 2018

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Year-over-year, all asset classes

Multifamily rents have again risen $4 to $1,381, up $14 over the last three months. Although this has produced a 1.1 percent year-to-date increase through May, the growth is showing to be much weaker than usual in the current cycle. The year-over-year increase has hit its lowest point over the last seven years, falling by 2 percent and down 70 basis points. Despite the decrease, rents continue to grow in most metros and have hit a peak of $15 year-to-date. However, this is $10 less than last year’s increase during the same time. According to Yardi Matrix’s monthly survey of 121 markets, rent growth is being held back by the abundant amount of projects coming online in the coming year, roughly 600,000 units under construction. This will make the largest impact in submarkets with the highest amount of scheduled deliveries and luxury apartments that make up 90 percent of the new construction.

—Posted on June 19, 2018

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Year-over-year, all asset classes

Despite the last two years of decelerating rent growth, the spring season proves its continued strength. After a substantial rent increase in March, which marked the best performance since last summer, multifamily rents in April have once again risen $4 to $1,377, increasing by $10 overall the last two months. Year-over-year, rents have increased by 2.4 percent, but down 20 basis points from March. The seasonal gain was widespread across major metros, all except for Raleigh. The top growth performers were once again Orlando, which had an increase of 6.2 percent, followed by Sacramento with 5.2 percent, Las Vegas rising 5.1 percent, Tampa (4.4 percent) and Phoenix (4 percent). Warm climates, strong job growth and domestic migration add to the success of these metros, although Sacramento is showing signs of deceleration after years of double-digit growth.

—Posted on May 14, 2018

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Year-over-year, all asset classes

March multifamily rents had its best performance since last summer, with average U.S. rents increasing by $4 to $1,371. Despite this, growth dropped 10 basis points year-over-year to 2.5 percent, decelerating from its peak of 5.4 percent growth in early 2016. Major concerns for the industry included peaking supply, declining occupancy rates and affordability, which had led many to speculate if the flattening growth since last summer was a natural pattern or if rents would remain flat for an extended period of time. Since last July, rents had not moved more than $1 in each direction, as shown by February’s rent performance in last month’s Yardi Matrix survey. Rent growth in the first quarter was weak compared to previous years, with gains averaging 1 percent in the first quarter of each of the last three years. Rents increased by $5 and were up 0.4 percent in the first quarter, marking the smallest increase since 2011.

—Posted on April 19, 2018

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Year-over-year, all asset classes

U.S. multifamily rents barely changed within the last 30 days, according to Yardi Matrix’s monthly survey of 121 markets. Rents rose $1 to $1,364, an increase of 2.7 percent year-over-year through February. Down 10 basis points from the previous month, February’s growth was the weakest seasonal gain since the recovery started. According to the report, it’s been seven years since rents had increased any less than the current amount. In terms of metro performance, Orlando has risen to the top position with a 7 percent year-over-year growth, outranking Sacramento’s rent growth of 6.8 percent, which places it second for the first time since June 2016. According to the report, Orlando has continued to benefit from strong job growth, increased migration in the wake of Hurricane Maria and a warm climate that doesn’t seem to suffer from seasonal rental declines.

—Posted on Mar. 20, 2018

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Year-over-year, all asset classes

On a year-over-year basis, multifamily rents have gone up 2.8 percent through January, which represents an increase of 20 basis points from last month. Despite this, the average rent only went up by $1 to $1,362, the same level it reached in July 2017. This could be due to the fact that rent growth tends to be flat throughout the winter months, but according to Yardi Matrix’s monthly report, rent growth is forecasted to remain in the range of 2.5 percent.

—Posted on Feb. 21, 2018

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Year-over-year, all asset classes

Showing the smallest annual increase since 2010, U.S. multifamily rents did not change in December, according to Yardi Matrix’s monthly survey of 121 markets. Rents remain at $1,359, a $4 drop from the highest rate achieved in September of $1,363. Over the past seven year, rents have grown by a minimum 3.3 percent annually, hitting its highest 5.4 percent in 2015, but ended 2017 with a 2.5 percent increase.

—Posted on Jan. 30, 2018