Multifamily performance remained strong in April, with rents rising for the second consecutive month. According to the latest Yardi Matrix National Multifamily Report, the average U.S. asking rent increased $6 to $1,725 last month. The year-over-year growth rate was flat at 0.7%.
“Although rent growth remains moderate, there are plenty of encouraging signs in the data,” noted the report. “Most important, demand for apartments continues unabated due to high levels of household formation stemming from the strong job market, large numbers of immigrants, and ongoing migration to the South and West.”
According to the report, absorption is not near 2021’s peak, but this year has started off at a pace that is on par with an average year and slightly ahead of levels in 2022 and 2023.
The Northeast and Midwest continue to be leaders for rent growth, with New York City experiencing 4.6% year-over-year growth, followed by Columbus, Ohio, at 3.8%; New Jersey at 3.5%; and Chicago and Kansas City, Missouri, at 2.9%.
In addition, Yardi Matrix is seeing negative rent growth abate in several high-supply Sun Belt markets. Austin, Texas, and Atlanta are the only metros among Yardi Matrix’s top 30 that are down by over 3% year over year.
In March, the national occupancy rate remained at 94.5%, where it has been since the start of the year.
Month over month, rents were up 0.3% in both the renter-by-necessity and luxury lifestyle segments. Rent growth was positive in the majority of the top 30 metros in both segments. Boston had the largest overall month-over-month rent growth at 1.1% across all asset classes. New Jersey led in the lifestyle segment at 1.2%, and Nashville, Tennessee, led in the renter-by-necessity segment at 1.2%.
The national lease renewal rate averaged 65.8% in March. According to Yardi Matrix, renewal rates were highest in New Jersey at 83.8% and lowest in Los Angeles at 56.1%. Renewal rent growth saw a 4.4% increase in March, up 80 basis points from the prior month. Year-over-year renewal rent growth has been under 5% since August.
On the single-family rental (SFR) side, asking rates jumped $9 in April to $2,154, with year-over-year growth increasing 10 basis points to 1.3%. SFR occupancy rates was 95.4% in March.
Boston and Raleigh, North Carolina, continued to see the highest year-over-year growth in March, while Austin; Phoenix; and Tampa, Florida, came in at the bottom of the list.
“SFR financing is picking up, a good sign of investor confidence. SFR operators securitized $1.9 billion of loans in the first quarter, putting the market on pace to surpass 2023’s $3.6 billion full-year volume, per ‘Asset-Backed Alert,’” noted Yardi Matrix.
