The national multifamily market remained steady in November, in standby awaiting policy changes to be brought on by the new administration., according to the latest Yardi Matrix national multifamily market report.
Report highlights:
- National advertised asking rents dropped $5 in November, to $1,744, for a 0.9% year-over-year increase.
- Contraction stepper in Lifestyle, but Renter-by-Necessity rents also inch down.
- Occupancy rebounds in several metros, expense growth moderates.
- SFR advertised asking rents fell $7 to $2,150 in November, occupancy decreased 40 basis points year-over-year through October to 95.1%.
Steady performance in the mid-fourth quarter
The average U.S. advertised asking rent continued to slide, down $5 in November to $1,744, with year-over-year growth down by 10 basis points to 0.9%. Rent growth remained consistent with the performance exhibited throughout the year at just under 1.0%, varying by region. Of Matrix’s top 30 metros, 16 posted positive rent growth and 14 recorded rent contractions. Gateway metros in the East and secondary markets in the Midwest remained in the lead for rent growth, headed by New York City (5.0%), Kansas City (3.4%), Detroit (3.2%), Washington, D.C. (2.8%), and Chicago and Indianapolis (2.7%). Some of the largest rent decreases were reported in Austin (-5.6%), Raleigh (-2.7%), Atlanta (-2.6%), Phoenix (-2.2%) and Orlando (-2.1%).
On a month-over-month basis, national advertised asking rents fell 0.3%, with 25 of the top 30 Matrix metros posting declines. The drop was significant in the Lifestyle segment, down 0.3%, while Renter-by-Necessity rents inched down 0.1%. Tampa posted a remarkable shift in rent growth, up 1.0% month-over-month, following rent contractions over the past year due to high supply levels. RBN rents rose 1.2% and Lifestyle 0.9%. Meanwhile, Denver and Austin posted steep declines. Denver overall advertised asking rents dropped 1.0%, -1.0% in Lifestyle and -0.9% in RBN, and Austin, rents fell 0.9% overall, -1.0% in Lifestyle and -0.8% in RBN.
Year-over-year growth in occupancy remained unchanged at 94.7% in October, but some metros show signs of rebound. Las Vegas outperformed with a 1.0% increase to 93.7%, while other metros with significant occupancy performance include Portland and Detroit (both 0.6%), Baltimore (0.4%) and San Francisco (0.3%).
Expense growth is decelerating, after two years of sustained increases. Market-rate properties recorded a 4.0% year-to-date uptick, down from 9.0% in 2023 and 7.1% in 2022. Within the affordable housing market, expenses rose 5.1% in 2024 through October, down from 8.3% in 2023 and 7.7% in 2022, according to Yardi Matrix Expert. Expense growth will likely moderate further, as insurance, labor and maintenance costs are softening. Eventual changes in policies could drive them up again.
SFRs lag multifamily
Advertised asking rents for single-family rentals dropped another $7 in November to $2,150, down 0.3% year-over-year. The average was $25 below the summer peak. The impact of consistent stock growth pushed the occupancy rate down 40 basis points year-over-year through October to 95.1%. While RBN occupancy remained at a healthy 96.6%, Lifestyle occupancy fell to 94.7%. By the end of the year, Matrix forecasts 36,683 units will come online, a new record for the segment. However, with just 13,000 build-to-rent single-family rentals breaking ground during the first three quarters of the year, stock expansion will dwindle in the second half of 2025 and beyond.
Read the full Yardi Matrix Multifamily National Market Report: November 2024.
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