Multifamily performance continues to show its strength. The U.S. asking rent increased $14 in March to another record high of $1,642, reported Yardi Matrix. However, rent growth is beginning to slow, dropping 50 basis points to 14.8% year over year.
“The big picture that emerges from the March multifamily data is that the market remains healthy, though signs point to the inevitable deceleration in some markets,” stated the report. “Meanwhile, economic conditions and global events contain headwinds that justify the expectations of moderation and caution.”
Sun Belt markets continued to lead the nation’s rent growth, with Miami, holding the top spot, with rents increasing 26.3% year over year. Orlando and Tampa, Florida; Las Vegas; and Phoenix also saw increases of 23% or more. In addition, outlier markets also showed significant growth in March, with Baltimore seeing a 9.9% increase and San Francisco experiencing an 8.7% bump.
However, according to Yardi Matrix, signs point to demand in Sun Belt and West Coast metros cooling slightly.
“Occupancy rates in several markets have decreased over the last year as demand hasn’t kept pace with deliveries,” the report stated, noting that Phoenix showed the largest decrease in occupancy, -0.5%, last month, followed by California’s Inland Empire and Las Vegas, -0.4%.
The month-over-month increase in March, which typically is the start of spring seasonal growth, was slightly lower than the same time in 2021 when rents rose $18 but still higher than a typical year.
According to Yardi Matrix, March’s month-over-month gains were led by San Jose, California, up 2.1%, and Seattle, up 1.8%. The metros with the lowest increases were Atlanta, 0.1%, and Baltimore, -0.6%.
Rents for single-family rentals continue to increase, rising $14 to $1,999 in March. However, that rate of growth also is starting to decelerate, decreasing 90 basis points to 14.1% year over year.
“Asking rents in the single-family rental sector continue to soar on par with multifamily,” said the report. “Rapidly rising house prices and growing competition from institutional investors are prevailing, putting homeownership out of reach for some potential buyers, while the increasing preference for suburban housing has added demand to single-family rentals.”
According to Yardi Matrix, asking rents increased 20% or more in seven metros. Orlando topped the list, with year-over-year rents rising 51.8% in March, followed by Miami, 35.1%; Toledo, Ohio, 25.3%; and Tampa, 23.3%.