Economic and financial market uncertainty hasn’t yet had a significant impact on multifamily fundamentals, which remained healthy in May. The average U.S. asking rent increased $6 to $1,761 last month, according to the latest Yardi Matrix National Multifamily Report. Year-over-year asking rent growth, which barely has moved over the last year, remained unchanged at 1%.
“It is still too soon to gauge the impact of higher tariff rates, though early metrics show that the economy and renter financial health are solid,” according to the report. “Wage growth continues to outpace inflation and rent, expanding the pool of prospective renters and supporting demand across the multifamily sector.”
The national occupancy rate inched down slightly to 94.4% in April. However, Yardi Matrix noted ongoing strong absorption in some high-supply markets that have struggled. “While rent growth remains negative year over year in most of the high-supply markets, recent gains point to resilient demand that should lead to a rebound in rents once the supply wave subsides,” noted the report. “For now, rent growth is driven more by supply metrics than trade-related inflation.”
Gateway and secondary markets in the Northeast and Midwest remained at the top of Yardi Matrix’s list for year-over-year rent growth in May. New York City led the major metros at 5.7% growth year over year, followed by Kansas City, Missouri, at 4%; Philadelphia at 3.4%; Columbus, Ohio, at 3.3%; and Detroit and Chicago at 3.1%. Negative rent growth was most concentrated in the Sun Belt: Austin, Texas, again experienced negative year-over-year rent growth at -5.2%, followed by Denver at -3.5%; Phoenix at -3.4%; Orlando, Florida, at -1.8%; and Dallas at -1.5%.
Month over month, rents inched up 0.3% in May, with only three of the top 30 metros posting rent drops. Both the lifestyle and renter-by-necessity segments saw a 0.3% increase.
On the single-family rental (SFR) side, asking rents increased $3 to $2,183 in May, with year-over-year growth falling by 0.1%. The occupancy rate remained stable at 94.8% in April.
According to Yardi Matrix, the top 30 metros for SFR were evenly split between those with positive and negative rent growth. Detroit, California’s Inland Empire, and Kansas City led for rent growth last month, while markets posting negative rent growth included Jacksonville, Florida; Austin; Phoenix; Tampa, Florida; and Dallas.
