The national overall average rent went up by $3 in July to $1,469, while year-over-year growth increased by 20 basis points from the end of the first quarter to 3.4%, according to Yardi Matrix. Smaller and fast-growing secondary and tertiary markets occupy the leading spots in terms of rent growth, while only two large metros made it to the top 5—Las Vegas and Phoenix. However, there’s a new entry in the top compared to our previous ranking.
5. Boise, Idaho
Boise continues to have a very strong economy, with a 3.6 percent employment growth year-over-year through June and an unemployment rate 130 basis points below the national average of 3.6 percent in May. Rents in the metro rose 7.1 percent year-over-year through July, well above the 3.4 percent national rate. The average rent stood at $1,176, 19.9% lower than the U.S. average. Only one community—the 172 Ridgecrest Commons in Nampa—came online in the first seven months of 2019.
While ranking as one of the top markets for multifamily deliveries mid-year, Phoenix also maintained its spot as the fourth U.S. metro for multifamily rent growth from our previous ranking, as its deep talent pool and robust employment growth continue to fuel rental demand. Although developers completed 5,355 apartments year-to-date through July, rent growth continued to outpace the national average by a factor of two, at 7.1 percent year-over-year through July. The metro’s average rent of $1,171 is still significantly below the country average.
3. Las Vegas
Multifamily fundamentals are strong in Las Vegas, bolstered by the metro’s fast-paced demographic and labor gains. Las Vegas had an employment growth rate of 2.1% in July. The average rent increased 8.0 percent to $1,108, remaining the third largest metro in terms of rent growth in the nation from the end of the first quarter. Almost 1,000 units were completed in the metro year-to-date through July, including the 396-unit The Well, one of Las Vegas’ top multifamily deliveries this year.
2. Wilmington, N.C.
Thanks to increased demand fueled by outstanding population gains and strong employment growth especially in the leisure and hospitality sector, Wilmington, N.C., started climbing up our rent growth rankings, coming in at no. 2, up three spots from the fifth spot it held at the end of the first quarter. With only one multifamily property completed in the first seven months of the year—the 120-unit Townhomes at Beau Rivage—supply doesn’t keep up with demand. As a result, rents surged 8.1 percent year-over-year through July to $1,182, the highest level in recent years. Wilmington is also one of the top markets for multifamily occupancy growth in the country, as it has coped with the aftermath of Hurricane Florence and as it braces for the impact of Hurricane Dorian.
1. Pensacola, Fla.
The metro’s blooming financial activities and education and health services employment sector contribute to healthy population growth following multiple years of stagnation or even demographic loss. As a result, development activity increased significantly and developers are expected to complete more than 2,000 units this year, 466 of which already came online. Rent rose 9.1 percent year-over-year through July to a record $1,178, while the metro’s occupancy rate increased by 50 basis points year-over-year through June, when it stood at 96.4 percent.