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Despite the pressure of surging multifamily supply, strong demand is helping to keep the market stable. According to the latest Yardi Matrix National Multifamily Report, the average U.S. asking rent remained flat in January at $1,710, a 0.5% year-over-year increase.

Rent growth is expected to be impacted by new supply, with Yardi Matrix forecasting a record 540,000 multifamily units to be delivered this year as well as 460,000 units in 2025.

“Another year of weak growth is expected in 2024 largely due to the rapid increase in deliveries that stems from the sector’s strong performance, high liquidity, and favorable treatment in the 2017 tax bill,” noted Yardi Matrix analysts.

The highest amounts of new supply will be in fast-growing tertiary and secondary markets primarily in the Sun Belt and West—such as Huntsville, Alabama; Port St. Lucie, Florida; Boise, Idaho; Colorado Springs, Colorado; Austin, Texas; Charlotte, North Carolina; and Nashville, Tennessee—where rent growth will likely remain tepid. However, markets that aren’t seeing an influx of supply, such as those in the Midwest and Northeast, are expected to keep seeing rising rents.

Year over year, rent growth has been highest in the Northeast and Midwest. New York leads the way with 5.5% year-over-year growth, followed by New Jersey, 4.4%; Columbus, Ohio, 4.2%; Kansas City, Missouri, 3.4%; and Indianapolis, 3%. Four out of 30 of Yardi Matrix’s top metros posted rent declines of 3% or more, with Austin seeing the biggest decline at -6%.

The national occupancy rate was 94.6% in December, unchanged from November but down 50 basis points year over year. Occupancy is either down or flat year over year in all but three markets—Seattle, San Francisco, and New York.

Month over month, rents were up 0.1% in the renter-by-necessity segment and unchanged in the luxury lifestyle segment. Nearly half of Yardi Matrix’s top 30 markets experienced monthly gains in overall rent, led by Columbus, 0.8%; Indianapolis, 0.6%; and the Twin Cities, 0.5%. San Diego experienced the largest month-over-month drop of -1%.

National rent growth for renewals continues to decelerate, falling to 5.1% year over year in November, down 10 basis points from October. Kansas City saw the highest renewal rent growth at 9.5%, followed by Miami, 8.9%, and Portland, Oregon, 7.8%. Phoenix and Austin, which both have robust delivery pipelines, saw the lowest renewal rent growth at 0.4% and 0.6%, respectively.

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