Advertised asking rents rose $4 to $1,743 in July, up 0.8% year-over-year, notes the latest Yardi Matrix national multifamily market report.
Report highlights:
- The average U.S. advertised asking rents rose $4 to $1,743 in July, up 0.8% year-over-year.
- Renter-by-Necessity rent growth remained ahead Lifestyle by 10 basis points, up 0.2% month-over-month.
- Some Sun Belt metros posted a rebound in rent growth in July.
- Advertised asking rents in the single-family rental segment gained $5 to $2,171, a new high.
Rent growth rebounds
The average U.S. advertised asking rent appreciated 0.8% year-over-year through July to $1,743. Although weak by long-term standards, multifamily rent growth is sustained by steady demand thanks to consistent economic growth and demographics. Growth was highest in gateway markets in the East and secondary markets in the Midwest, headed by New York city (5.2% year-over-year), Washington, D.C. (4.0%), Kansas City (3.4%) Columbus and New Jersey (both 2.9%). Rent growth remained negative in 12 of the top 30 markets tracked by Yardi Matrix, with the largest drops in Austin (-5.7%), Atlanta (-3.3%) and Raleigh (-2.8%).
National occupancy decreased 0.4% year-over-year in June, to 94.6% for the seventh consecutive month. The rate increased only in Las Vegas (0.7% to 93.6%) and Twin Cities (0.1% to 95.0%). The largest occupancy drops were recorded in Indianapolis, Houston, Dallas and Kansas City (all down 0.8%).
U.S. advertised asking rents rose 0.2% month-over-month in July, higher in the Renter-by-Necessity segment (0.2%) than in Lifestyle (0.1%). Washington, D.C. led in monthly asking rent gains (0.9% across property segments), followed by New York (0.7%), Dallas and Austin (0.6%). While 13 of the top 30 metros registered declines, with Boston dropping the most (down 0.7%), in several Sun Belt metros rent growth rebounded. Examples include Austin, Raleigh and Phoenix.
SFR rents reach new high
Economic indicators such as GDP (up 2.8% in the second quarter) and job growth (1.3 million jobs added during the first half of the year) reflect a steady economy, which although pointing to a cooldown, will likely lead to a soft landing and not a hard recession. Inflation, CPI and the personal consumption expenditures price index rate of growth combined increase the chance that short-term rates will be cut sooner and more deeply than expected.
The average national SFR advertised asking rent gained $5 in July to $2,171, for a 1.0% year-over-year increase. Meanwhile, occupancy slid to 95.3% in May, at 96.7% in RBN and at 95.0% in Lifestyle. Demand for single-family rentals continues to be sustained by the high cost of homeownership and the lack of available homes for sale. Markets with high levels of new supply are showing signs of rent growth softening. Among these are Orlando (-1.1% year-over-year to $2,362), Savannah, Ga. (-1.5% to $2,283) and Huntsville, Ala. (-1.7% to $1,602).
Read the full Yardi Matrix Multifamily National Market Report: July 2024.
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