Rents across the nation continue to inch up each month but not at the pace seen in 2021. According to Yardi Matrix, average month-over-month asking rents increased 1.1% in May compared with the 1% increase the prior month. However, year-over-year asking rents dropped from 16% in April to 14% in May.
“While we are seeing the usual seasonal increase leading into the summer months, 2022 does not look like a repeat of 2021 even though rent growth remains elevated,” stated Yardi Matrix analysts.
Of the markets that Yardi Matrix tracks, only six markets saw asking rents fall: the gateway markets of Brooklyn and Queens, New York; Honolulu; smaller Southern markets Jackson, Mississippi, and Macon, Georgia; and the Southwest Florida Coast. Eighty-four markets, however, did see month-over-increases greater than 1%, and seven markets topped 2%: Charleston, South Carolina; Knoxville, Tennessee; Miami’s Bay Area and South Bay; Portland, Maine; the Twin Cities; and Wilmington, North Carolina.
Yardi Matrix has revised its forecast for its year-end projections in most markets, with some being increased substantially. The biggest increases are concentrated in secondary and tertiary markets that are outperforming expectations, with Scranton-Wilkes Barre, Pennsylvania; South Bend, Indiana; Spokane, Washington; and Wilmington seeing a 5% boost for year-end.
Despite some significant obstacles, such as inflation, the risk of recession, and turbulence from the war in Ukraine, Yardi Matrix is still optimistic, citing strong job and wage growth.
“While it will be prudent to keep an eye on these risks, we still believe that we will most likely make it through 2022 without a recession or a major shock to multifamily markets,” according to the special report. “The fundamentals of supply and demand remain strong, and the job market is still hot. The rate of increase in asking rents might be beginning to slow down, but growth remains significantly elevated by historical standards.”
