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Rents and occupancy were relatively flat in August, according to the National Multifamily Report from Yardi Matrix. The average U.S. asking rent increased $1, or 0.1%, to $1,728, while year-over-year growth dropped to 1.5%, down 20 basis points from July.

“Economic growth continues to be stronger than expected, providing a backdrop to consistent multifamily demand. U.S. asking rates rose slightly in August, while occupancy remained strong at 95%,” stated the report.

For the short term, supply growth is a driving factor in metro-level rent growth. Most metros that are seeing the highest year-over-year growth are benefiting from a weak supply pipeline—New York, Chicago, Indianapolis, and San Diego.

Asking rent growth in August was concentrated in the renter-by-necessity segment, which increased 0.1% month over month, while lifestyle rents declined 0.1%. Out of the top 30 Matrix metros, rents increased in 16 metros for the renter-by-necessity segment but only in 13 for the lifestyle segment.

According to Yardi Matrix, approximately 190,000 multifamily units have been absorbed through July. This is behind the pace of 2021’s record total of almost 600,000 units but “is otherwise healthy.” Among the top 30 metros, absorption in absolute numbers has been led by Washington, D.C.; Phoenix; Miami; Chicago; and Denver this year. As a percentage of stock, Charlotte, North Carolina; Tampa, Florida; and Nashville, Tennessee, are among the best-performing metros year to date.

The single-family rental (SFR) sector saw rent declines in August. National asking rents for SFRs dropped last month by $6 to $2,104, while year-over-year growth declined by 70 basis points to 0.5%. Occupancy rates fell by 10 basis points to 95.7% in July.

“SFR rental performance remains strong, although there is a slight softening at the end of the market. Both rents and occupancy rates have moderated this summer,” stated the report.

The weakening is concentrated in the lifestyle segment, with year-over-year rent growth turning negative at -0.4% as of August. Renter-by-necessity rents increased by 2.9%. Year over year through July, lifestyle occupancy rates declined 100 basis points to 95.3%, while renter-by-necessity occupancy rates increased 290 basis points to 97.7%.