Top 10 Markets for Multifamily Rent Growth

Northeast markets led year-over-year, according to the latest Yardi Matrix data.

The year 2023 saw the end of a very strong run for the U.S. multifamily market. National rent growth, although slighter than in 2022, remained strong, as a regression to the mean slowly set in. But not all regions and markets shared a common experience, in fact, rent performance was mixed by region, and balanced enough between year-over-year gains and losses. In the ranking below, we list the top 10 markets for rent growth on a year-over-year basis through November, based on Yardi Matrix data. For context, we’re also examining the occupancy rates and construction and delivery pipelines during the interval.

Key takeaways

  • All markets, except Midland–Odessa, are Northeast and Midwest-based.
  • Rent growth was in the double digits in just one market.
  • Occupancy decreased in all but three markets—rose in one and remained flat in two.
  • The tightest rental markets were New York metros, with the occupancy rate above 96 percent in October.
  • Five of the top 10 metros for rent growth are New York markets.

1.      Midland-Odessa, Texas

The only metro outside of the typical growth regions of 2023, Midland–Odessa is a relatively small metro located mid-way between El Paso and Fort Worth, Texas, and one of the country’s top oil producers. Rents increased here by 10.6 percent year-over-year to $1,369, making it affordable compared with the national average of $1,713. The metro also led in rent growth by asset class, up 12.0 percent to $1,184 in the Renter-by-Necessity segment, and up 9.2 percent to $1,666 in the Lifestyle segment.

The scanty inventory expansion has contributed to this remarkable rent growth, as just 306 units came online in Midland–Odessa in 2023 through November, the third-smallest stock expansion among the metros in this ranking. The construction pipeline was also scarce—and the weakest of the group—with just 250 units underway. Still, the metro displayed solid demand, as it was one of the two metros in this list to mark an increase in the occupancy rate in stabilized properties, up 1.3 percent in the 12 months ending in October, to 93.7 percent, the lowest among the metros in this list.

2.      Madison, Wis.

The state capital came in second, with the average rent rising 7.3 percent year-over-year to $1,498 in November, trailing the U.S. figure. Rent growth was led by the working-class RBN segment, with rents up 8.9 percent to $1,374, while Lifestyle rents rose 4.7 percent to $1,713. Interestingly, Madison posted a considerable drop in the occupancy rate, down 70 basis points year-over-year, second highest among the metros in this list, at 97.7 percent as of October.

One of the factors contributing to the drop in occupancy was the stock expansion, as 2,864 units were delivered in 2023 through November. Moreover, another 7,219 units were under construction, which could further affect occupancy in the coming year, and slightly pressure rent growth.

3.      Syracuse, N.Y.

The first of the five New York metros in this ranking, Syracuse ranked third for rent growth year-over-year through November, with a 7.1 percent rate, increasing the average asking rent to $1,262, far behind the $1,713 U.S. average amount, and the second most affordable of the group, trailing only Dayton. In line with national trends, rent growth was led by the RBN segment, up 7.6 percent to $1,217, while Lifestyle rents rose 3.0 percent to $1,849.

Syracuse was the other market in this group where occupancy increased, even if just 10 basis points, to 96.3 percent in October. The upscale rental market was especially tight, with Lifestyle occupancy at 98.5 percent. The rent–occupancy dynamic was favored by limited stock expansion, as just 231 units came online in 2023 through November. More so, construction activity remained sluggish, developers having just 754 units underway in November.

4.      Buffalo, N.Y.

Another New York metro, Buffalo posted an annual rent growth of 6.4 percent to $1,268 in November, also well below the national average. The asking rent makes it the third most affordable metro in this ranking. RBN rent growth stood at 6.9 percent, which increased the sector’s average asking rent to $1,217, while Lifestyle rents rose 3.6 percent to $1,743.

The occupancy rate in stabilized properties decreased 30 basis points year-over-year in October but remained at a tight 97.1 percent. Here too, occupancy was higher in the Lifestyle segment (98.4 percent), but RBN was not far behind, at 96.9 percent. Deliveries through November amounted to just 435 units, but developers had a consistent 3,155-unit volume under construction which will help decompress the rental market and soften rent growth.

5.      Worcester–Springfield, Mass.

Neighboring New York to the north, Worcester–Springfield posted an average asking rent on par with Buffalo’s, up 6.4 percent year-over-year in November to $1,786. The metro is one of the three markets in this group with the average asking rent above the $1,713 national rate. One particularity of the market is rent growth by asset class, as unlike the rest of the metros in this group as well as the national trend, rent growth in Worcester–Springfield was led by the upscale Lifestyle segment, up 6.6 percent to $2,575. Still, RBN rents also increased by a substantial 6.2 percent to $1,653. The metro posts one of the largest disparities between average rents by asset class, of $922.

Rent growth was sustained by limited deliveries, with just 413 units coming online in the metro through November. The landscape doesn’t show signs of immediate change as the construction pipeline had 1,656 units underway. Meanwhile, the occupancy rate dropped 70 basis points year-over-year as of October, to 96.7 percent. The decline was equal across asset classes, to 96.3 percent in the Lifestyle segment and 96.8 percent in the RBN segment.

6.      New York

The only gateway (and large) metro in this ranking, New York’s rental market posted a formidable performance in 2023, recovering spectacularly after the pandemic. The average rent growth rose 6.2 percent year-over-year, to $4,413 in November, which makes it one of the most expensive markets, not in this ranking, but in the U.S. Rent growth was strongest in the RBN segment, up 8.5 percent to $3,316. Lifestyle rents also rose a solid 5.3 percent, to $5,044.

Developers brought online 4,260 units in 2023 through November and had 39,598 units under construction. Demand was strong, which kept occupancy flat at a very tight 98.1 percent as of October, the highest occupancy rate among the metros in this list. Specifically, Lifestyle occupancy increased 10 basis points year-over-year to 98.2 percent and remained flat at 98.0 percent for RBN units.

7.      Dayton, Ohio

Nestled between Indianapolis, Columbus and Cincinnati, Dayton rents were up 6.0 percent year-over-year in November to $1,092. At this amount, the metro is the most affordable rental market in this group and well behind the $1,713 national rate. RBN rents led growth, up 6.3 percent year-over-year to $1,035, and Lifestyle rents rose 4.4 percent year-over-year to $$1,491.

Deliveries through November amounted to 455 units, while the construction pipeline had another 1,720 units underway. Meanwhile, the occupancy rate dropped 40 basis points year-over-year in October, to 96.0 percent, marking a larger slide in the Lifestyle segment—down 60 basis points to 96.7 percent—and by 30 basis points to 95.8 percent in the RBN segment.

8.      Rochester, N.Y.

The fourth New York-state metro in this ranking, Rochester sits between Buffalo and Syracuse. Rents rose 5.7 percent year-over-year through November to $1,353. While the average asking rent in the metro is higher than the other smaller New York markets in this list (Buffalo and Syracuse), it’s lagging the U.S. Rent growth was strongest in the RBN segment, up 6.1 percent to $1,307, and more than double the increase registered in the Lifestyle segment (2.6 percent to $2,004).

Despite strong rent growth, demand softened in Rochester, based on the lack of new stock delivered in 2023 through November and the occupancy rate in stabilized properties, which declined 30 basis points year-over-year through October to 96.5 percent. The drop in occupancy was caused solely by a decline in the RBN segment, down 40 basis points to 96.4 percent. Lifestyle occupancy increased 20 basis points to 97.0 percent during the period. Although no units have been delivered so far in 2023, the construction pipeline had 1,906 units underway.

9.      Albany, N.Y.

The final New York metro in the list and one of the emerging markets of 2023, Albany posted an annual rent growth of 5.4 percent to $1,534, surpassing Rochester, Buffalo and Syracuse, but still below the $1,713 national figure. Working-class RBN rents led growth, up 6.1 percent to $1,373, while Lifestyle rents increased 4.2 percent to $1,939.

Just 140 units came online in Albany in 2023 through November, but developers had a substantial 3,985 units under construction. While the occupancy rate remained flat in October at 96.8 percent, the new supply additions might impact the rate in the upcoming year. Similar to Rochester, healthy demand for Lifestyle units pushed occupancy up 20 basis points year-over-year to 97.0 percent, while for RBN, the rate dipped 10 basis points to 96.8 percent.

10. Bridgeport-New Haven, Conn.

Closing the ranking is a New York neighboring metro. Rents in Bridgeport – New Haven rose 4.9 percent year-over-year in November to $1,918, surpassing the $1,713 national rate. RBN rent growth during the period was 6.6 percent to $1,587, more than double the rate registered in the Lifestyle segment (2.9 percent to $2,558). The metro posts the second largest difference between average rents by asset class, behind only New York.

Developers delivered 2,867 units in 2023 through November, the third largest volume among the metros in this list. In addition, they had 9,488 units under construction, which is the second largest pipeline of the group, behind only New York. Occupancy remained flat across property segments, at 96.2 percent for Lifestyle units and 96.6 percent for RBN apartments. Overall, Bridgeport-New Haven’s occupancy stood at 96.5 percent in October.

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