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Signaling a return to a normal seasonal growth pattern, national asking rents posted their largest gain in 20 months. According to the latest Yardi Matrix National Multifamily Report, the average U.S. asking rent increased $8 to $1,721 in March. In addition, the year-over-year growth rate increased to 0.9%.

Yardi Matrix explained that the 0.5% growth for the month and the first quarter is in line with the 0.6% average for March and the first quarter in the five years preceding the pandemic.

Out of the Yardi Matrix top 30 metros, 13 have experienced negative rent growth over the past year; however, that situation is beginning to reverse. Only four recorded negative rent growth in the first quarter, and only two were negative in March.

“March’s multifamily data should provide some level of comfort for the many market observers worried about the sector’s performance this year owing to slowing economic growth or the robust supply pipeline,” noted the report. “While one month of data doesn’t constitute a trend and rent growth likely will remain constrained due to affordability and new supply, the tone early in 2024 is encouraging.”

The national occupancy rate came in at 94.5% in February, which is down 10 basis points from January. It has been below 95% since June.

Markets in the Northeast and Midwest continue to lead the rent growth rankings. In March, New York City saw 5% year-over-year growth, followed by Columbus, Ohio, at 4.5%; Kansas City, Missouri, at 3.7%; Indianapolis at 3.5%; and New Jersey at 3.4%. Austin, Texas, which is seeing a high volume of new deliveries, is the only metro that is down by 3% or more year over year.

Month over month, rents were up 0.5% in both the renter-by-necessity and luxury lifestyle segments. Rent growth was negative in just two of the top 30 metros in the lifestyle segment and in three in the renter-by-necessity segment; however, Yardi Matrix noted these declines were modest as no metro recorded a decline of 0.5% or more.

The national lease renewal rate averaged 64.8% in January, with renewal rent growth continuing to slow. In January, it decreased to 4.6% year over year. Only two metros had negative renewal rent growth—Las Vegas and Austin. Indianapolis had the highest at 8%.

On the single-family rental (SFR) side, asking rates jumped $9 in March to $2,144, with year-over-year growth falling 20 basis points to 1.2%. SFR occupancy rates decreased slightly to 95.3%.

Boston and Raleigh, North Carolina, continued to see the highest year-over-year growth in March, while Austin; Orlando, Florida; Phoenix; and Tampa, Florida, came in at the bottom of the list.

“The capital side of the equation remains problematic, as the high cost of capital has largely eliminated scattered-site acquisitions and reduced investors’ return expectations,” noted Yardi Matrix. “Despite that, SFR distress is rare, as occupancy rates and rents are still high.”