Report highlights:
- The average U.S. advertised asking rent marked the third consecutive month of declines in October, down $3 to $1,748, for a 0.9% year-over-year increase.
- Lifestyle rents drive rent decline, Renter-by-Necessity remain unchanged.
- Occupancy stabilizes, supply controls rent growth.
- SFR advertised asking rents fell $8 to $2,164 in October, occupancy inches down 10 basis points to 95.1% in September.
Typical fourth quarter slowdown
The average U.S. advertised asking rent remained on a downward trend in October, falling $3 to $1,748 for a steady 0.9% year-over-year increase. Despite the decline, demand kept up with supply, with the occupancy rate sliding just 10 basis points year-over-year to 94.7% in October. While most metros registered minor changes, Las Vegas outperformed, with occupancy up 100 basis points to 93.7%. In 2024 through September, 329,000 units have been absorbed nationally.
The market’s performance remains primarily influenced by supply growth. In Yardi Matrix’s top 30 metros, the top 11 metros for rent growth were all in the Northeast, Mid-Atlantic and Midwest, while the bottom-ranking nine were all high delivery metros in the Southeast or Southwest. Gateway markets in the East and secondary markets in the Midwest continued to lead by year-over-year rent growth, with the highest increases recorded in New York City (5.3%), Detroit and Kansas City (both 3.7%), Washington, D.C., (3.2%) and Columbus (3.1%). Substantial rent declines were posted by Austin (-5.5%), Raleigh (-3.1%), Phoenix (-2.4%), Atlanta (-2.3%) and Orlando (-2.2%).
National advertised asking rents declined 0.2% month-over-month in October. Rent movement remained negative due to a downward trend in the Lifestyle segment, down 0.3% month-over-month, while RBN rents remained flat. Rent performance was flat or negative in 29 of the top 30 metros in Lifestyle and 19 in RBN. Rent growth was positive only in Detroit, with rents up 0.3% in both segments. Significant declines across segments were recorded in high-supply markets, including Denver (-1.0% in Lifestyle and -0.9% in RBN) and Austin (-0.9% in both). Both metros posted substantial stock expansions over the last year, up 4.6% in Denver and 7.6% in Austin.
Supply remains the main determining factor in the evolution of the multifamily market. In the short term, it keeps rent growth flat or negative in markets with high volumes of new supply. In the medium term, rent growth will likely pick up in 2026 and 2027, driven by a drop in deliveries as new construction through 2024 has softened. In the long term, the housing shortage in the U.S. could worsen the affordability issue unless new construction increases significantly.
SFRs post largest rent decline in years
SFR advertised asking rents fell $8 in October to $2,164, for a year-over-year growth that decreased 30 basis points to 0.3%. Occupancy in the sector slid 10 basis points year-over-year in September to 95.1%, solely due to a 10-basis-point decline in the Lifestyle segment, to 94.7%. Yet, demand remained solid, as more than 2.5 million households moved into SFRs over the past year according to data from the U.S. Census Bureau. The reasons cited included a desire for a new or improved home (15.3%), a new job or transfer (10.9%), cheaper housing (9.4%) and establishing a new household (8.7%). The variety signals that demand is strong enough to withhold future challenges.
Read the full Yardi Matrix Multifamily National Market Report: October 2024.
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