National average asking rents stopped growing last month, according to the latest Yardi Matrix Multifamily Report. The average U.S. asking rent decreased by $1 in August—the first month-over-month decline since June 2020—to $1,718. For the second month in a row, year-over-year growth slid more than a full percentage point to 10.9%.
“Rent growth tends to slow in the fall, but this year comes at the tail end of the unprecedented increases. The deceleration in August was strongest in many of the markets that have had the most growth over the past two years, a sign that affordability is becoming an issue,” stated the report. According to Yardi Matrix, it’s possible that deceleration could continue for the rest of 2022.
For example, year-over-year rent growth dropped 7 to 8 percentage points over the past two months in the strong Florida markets of Orlando, 16.9%, in August; Miami at 16.7%; and Tampa at 14%.
However, the multifamily market remains strong, with year-to-date rent growth higher than any previous year prior to 2021 and a national occupancy rate of 96% for a fifth month in a row.
Month over month, national asking rents decreased by 0.1% in August. In addition, asking rents rose in only 10 of Yardi Matrix’s top 30 metros last month. Philadelphia, San Francisco, and Nashville, Tennessee, saw the highest month-over-month increase at 0.5%, followed by New York and Miami at 0.3%. The metros with the highest decreases included Raleigh, North Carolina, at -1.3%, Seattle at -1.1%, and California’s Inland Empire and Las Vegas, both at 0.8%.
According to Yardi Matrix, the single-family rental sector continues to mirror multifamily activity.
The average national asking rent decreased $2 last month to $2,092 as occupancy rates decreased 1%. According to Yardi Matrix, 17 of its top 35 metros experienced year-over-year rent growth of 10% or more in August, with the highest increases in Washington, D.C., 40.1%, and Orlando, 39.6.
Yardi Matrix said it expects rent growth for single-family rentals to moderate. “Higher financing costs and fewer home sales are likely to reduce the acquisition pipeline,” said the report. “However, demand should remain firm as purchasing a home grows further out of reach for more consumers, driving them to the single-family rental sector.”
