Recent data from MRI Software finds that the multifamily industry is shaking off the lingering effects of the COVID-19 pandemic. Its latest report shows significant increases in rent pricing for new leases in combination with a decline in concessions.
New lease pricing is up by approximately 20% in the past eight months, with MRI predicting that it is likely to stay “hot throughout summer,” the prime leasing season. Concessions, which have been increasingly popular since the start of COVID-19 and peaked during summer 2021, also have returned to pre-pandemic levels. In addition, the gap between pricing for new leases and renewals has increased in recent months, but MRI expects it to narrow as demand for units far outweighs supply.
“It’s already a landlord’s market,” said Brian Zrimsek, industry principal at MRI Software. “And we’re about to enter the summer season, which is traditionally the most active and lucrative season for leasing. Given the other market forces we’re experiencing, such as low unemployment, low supply of new housing, and high inflation, we can expect a challenging summer for renters.”
The MRI data also shows that while rent pricing has risen, overall payment performance and delinquency has remained in check with renters meeting their obligations. While on-time payment performance slightly eroded since the pandemic’s start, a rebound has been seen in recent months, nearing pre-pandemic levels.
In addition, the report notes that use of technology throughout the resident lifecycle, which was accelerated by the pandemic, continues to grow. Resident portal usage and electronic payments continue to see steady gains. According to MRI, resident portal usage is 2.5 times higher than in January 2019, and electronic payments recently exceeded 4.5 times the volume in that same period.
“At the outset of the pandemic, the need for social distancing drove renters and landlords to adopt online applications, resident portals, electronic payments, and online service requests. Today, usage of these tools is at an all-time high, enabling property managers and leasing staff to focus on what matters most: providing excellent service to their residents,” added Zrimsek. “Thanks to the efficiencies of technology, we can safely assume that these tools are here to stay.”