As the economy recovers, more renters are entering the market, accelerating occupancy and rent growth, according to data released by MPF Research at RealPage.
And while some renters are leaving the market to make home purchases, there is still a surge of demand for apartments. In fact, first quarter demand was reported to be up 44% compared to early 2014, according to MPF. The annual apartment demand count hit 276,513 units.
As developers scramble to keep up with demand, occupancies continue to climb with the rate reaching 95.4% in the first quarter, about 10 basis points (bps) above the preceding quarter and 40 bps year over year. Availability is particularly limited in the mid-prices and affordable properties, the report notes, since the bulk of new deliveries are at the upper end of the price spectrum.
Meanwhile, rent growth continues to soar with a 4.6% increase nationally in the first quarter. However, the research firm predicts growth will begin to slow down over the next year to the 3.6% to 3.9% range, which is still quite healthy by historical norms.
Top 10 Rent Growth Markets of the First Quarter
1. Denver-Boulder, 10.5%
2. (tie) Oakland, 10.2%
2. (tie)San Francisco, 10.2%
4. San Jose, 9.3%
5. Portland, 7.9%
6. Atlanta, 7.5%
7. West Palm Beach, 7.2%
8. Sacramento, 6.7%
9. Fort Worth, 6.6%
10. Los Angeles, 6.4%