In a recent release, the Dallas-based research firm called the apartment industry’s fiscal third quarter the “strongest summer in nine years” as the industry's torrid pace for 2015 continued.
Axiometrics pointed to the average national rent of $1,247 for the third quarter, which was a $59 increase from the average of $1,188 in 2014’s third quarter. To reach that level, apartment owners posted 5.2% annual rent growth, which represented a 20 basis point increase from the 5.0% reported in 2015’s second quarter and a 110 basis point rise from the 4.1% in 2014’s third quarter. “The rate is the highest since the third quarter of 2006, when rent growth was 5.3%,” Axio said in the report.
Like MPF last week, Axio said rent growth beat the 5.0% mark again in the third quarter. That makes 2015 three-for-three in plus-5% quarterly rent growth, a feat not seen since 2006, according to Axio.
“Quarter-over-quarter effective-rent growth of 2.0% was a 29-basis point increase over the 1.7% reported in the third quarter of 2014 and the first time a third-quarter figure was 2.0% or higher since 2005,” Axio noted.
While second quarters usually have the strongest quarterly effective-rent growth of the year, the 77-basis point quarterly rate decrease from the second quarter of 2015 to the third quarter was the smallest second-to-third-quarter decrease since 2011.
Like MPF, Axio also put occupancy above 95% for Q3 2015, at 95.3%. This is the highest level since occupancy hit 95.7% in the first quarter of 2001. That rate represented a 5 basis point increase from the second quarter.
“This has so far been the strongest year for the apartment market since the end of the Great Recession, and these quarterly figures are additional confirmation of that,” said Stephanie McCleskey, vice president of research for Axiometrics, in the press release. “This year has also shown more widespread strength nationwide. Metropolitan areas in the Northeast and Midwest that were down a year ago are resurgent, and the West, South, and most of Texas remain strong. Job growth is better in all regions, and single-family home prices keep rising.”