Multifamily rents in February remained unchanged from January at an average $1,702 U.S. asking rent. Year-over-year growth, which continued its decline, is 4.8%, down 70 basis points from the prior month and the lowest level in nearly two years, according to Yardi Matrix.
“The big question is whether demand and rents pick up as normal in the spring. Demand has come down from 2021 levels, though it remains positive in most markets,” said Yardi Matrix.
While asking rent growth remains positive year over year in almost every metro, 23 of Yardi Matrix’s top 30 metros recorded negative growth over the last three months. Seventeen were negative in February.
Many of the metros that recorded high increases over the last two years are now negative or barely positive year over year. Over the past year, Las Vegas (-1.6%) and Phoenix (-1.2%) saw negative rent growth, and Austin, Texas (2%), Atlanta (2.2%), and Sacramento, California (2.3%) are barely above water, Yardi Matrix reported.
Three Midwest metros have risen into the top five of the top 30 metro list for year-over-year rent growth. This includes Indianapolis (9%), Kansas City, Missouri (7.9%), and Chicago (6.3%).
“Although metrics such as the job market and consumer spending growth remain healthy, the Federal Reserve has resolved to induce job losses to reduce inflation, which will impact multifamily demand,” said Yardi Matrix.
In the single-family rental (SFR) sector in February, the average U.S. asking rent increased $1 from January to $2,071. Asking rates for SFR units fell by 80 basis points to 3.4%, far below the 14.8% growth rate a year ago.