Multifamily rents remained flat in February, with year-over-year growth unchanged at 1.2%. The average U.S. asking rent increased $1 to $1,751, according to the latest Yardi Matrix National Multifamily Report.
This year is no exception to the historic multifamily performance trends of slower winter months heading into the spring moving season. However, uncertainty continues to weigh on the industry.
“The market, however, is about to be tested. Will rent growth pick up in March as befits the usual seasonal pattern?” noted the report.
The first issue is around the rate of absorption in markets with high supply. In Yardi Matrix’s top 30 metros, 10 recorded supply growth of 4% or more as a percentage of stock and six added at least 6% over the past year. In all six of the metros with the highest supply, rent growth was negative year over year. Yardi Matrix, which forecasts 2025 deliveries to be strong before falling next year, pondered in the report whether continued strong demand will allow for rents to turn positive in these markets or if they will need months to absorb the new supply.
“Another question revolves around the economy. After years of stability and consistent job growth, the country is getting a dose of new policy that has roiled the financial market. Some estimates put the number of layoffs in February at more than 170,000, the largest number since the Global Financial Crisis. Potentially, tariffs could add to inflation, which likely would prevent short-term interest rates from falling,” stated the report.
While the policy outlook is still unclear about what will play out, Yardi Matrix noted “the coming months will be consequential for multifamily.”
New York City continued to top the major metros for year-over-year rent growth, coming in at 5.6% in February, followed by the Midwest metros of Kansas City, Missouri, at 4.1%; Columbus, Ohio, at 3.8%; Chicago at 3.6%; and Detroit at 3.5%. Austin, Texas, continued to see negative year-over-year rent growth at -5.1%, followed by Denver at -3.1%; Phoenix at -2.2%; Atlanta at -1.8%; and Raleigh, North Carolina, at -1.7%.
According to Yardi Matrix, the national occupancy rate in February held steady at 94.5%; however, it has been falling in many of the high-supply markets.
Month over month, rents inched up 0.1% in February, with 10 of the top 30 metros posting rent drops. The renter-by-necessity segment saw a 0.1% gain, while the lifestyle segment remained flat.
On the single-family rental (SFR) side, asking rents were flat in February at $2,165, with year-over-year growth unchanged at 0.2%. The occupancy rate was stable at 94.7% but decreased 0.7% year over year.
According to Yardi Matrix, SFR starts and deliveries are decreasing this year and next but at a slower rate than multifamily. It forecasts multifamily deliveries to drop 14% this year compared with 2024; however, build-to-rent (BTR) is projected to only decrease 6%.
“Although BTR completions are forecast to drop, the segment’s growth as a share of multifamily supply remains high,” noted the report.
The markets expected to lead with the most BTR deliveries in the next two years include: Phoenix, with 8,670 units; Dallas with 6,422 units; Atlanta, with 5,135 units; Austin, with 2,940 units; and Charlotte, North Carolina, with 2,798 units.
