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Asking rents for professionally managed apartments inched up 0.2% year over year and month over month in February, according to the latest data from RealPage Market Analytics.

“Dating back to 2010, the average monthly rent increase for February has been about 0.6%,” said Carl Whitaker, senior director of research and analysis at RealPage. “While February saw rents increase 0.2% month over month, momentum remains aloof. Still, the February increase of 0.2% was the largest monthly increase dating back to June 2023, which suggests that seasonal movement in rents—though muted—appears to be following historical trends.”

According to RealPage, it expects muted rent growth to continue throughout the year as new supply puts downward pressure on rents.

February marked the third consecutive month that occupancy held steady at 94.1%, with RealPage saying that supports the idea that it’s reaching a stabilization point.

However, the surge of new apartment supply is expected to be a headwind for the remainder of this year for occupancy and rent growth. Nearly 962,000 apartment units were under construction at the end of 2023, with about 672,000 projected to be delivered in 2024.

“Supply remains the key driving force behind markets seeing the deepest rent cuts,” said Whitaker. “Development hot spots, such as Austin, Texas; Jacksonville, Florida; Nashville, Tennessee; Orlando, Florida; Phoenix; Salt Lake City; and Raleigh/Durham, North Carolina, all rank in the bottom 10 for rent change performance among major U.S. markets, as each posted deep rents cuts as of February.”

Austin, which posted annual rent cuts of 6.7% in February, has experienced a continuous wave of new supply in recent years. In 2023, over 17,000 new apartments were delivered, growing the market’s apartment stock by 6%. An additional 43,000 units were underway at the end of the year, and the market is expected to grow its total apartment inventory by 11.2% this year.

Also posting rent cuts, Salt Lake City and Nashville grew total inventory 7% or more last year.

The Midwest and Northeast, which are seeing more modest apartment construction, saw year-over-year asking rent growth of 2.8% and 2.7%, respectively, in February.

Virginia Beach, Virginia; Washington, D.C.; Cincinnati; and Milwaukee, which are relatively low-supply markets, topped the list for annual rent growth last month.

“In the Midwest and Northeast, historically normal rent growth remains in place due to limited supply and characteristically steady demand,” Whitaker said. “Conversely, rents fell by 1.2% in the supply-heavy South region and by 0.4% in the demand-constrained West region.”

While it’s hard to find markets where occupancy has increased over the past year, RealPage points to several examples: San Francisco, West Palm Beach, Florida; and Virginia Beach.

In San Francisco, occupancy levels remain below pre-pandemic levels, but the modest increase is a sign that the market is working toward stabilization. As of February, occupancy averaged 95.5%, a year-over-year increase of 50 basis points.

“West Palm Beach and Virginia Beach, meanwhile, are two markets where countercyclical demand drivers, such as retiree-driven demand (West Palm Beach) and military-driven demand (Virginia Beach) have supported occupancy stabilization,” added Whitaker.

RealPage also noted that these three markets saw less relative supply growth last year than the national overall.