June's Average Multifamily Rent Tops $1,700 for First Time
It is becoming almost unanimous among apartment rent forecasters that what has been a strong rent growth run across most of the country in the past two years is starting to moderate. To name one example, CoStar just predicted that demand will cool over the next six months, noting that rent growth rose 9.2% in Q2, down from 11.4% in the first quarter.
Yet rent growth is still far higher than it was pre-pandemic, with new benchmarks continuing to be set. The latest example comes from Yardi Matrix, which reports that average US rents rose above $1,700 for the first time in June after adding another $19 since May.
Rents Up 10% or More in 25 of 30 Markets
Yardi Matrix said that the increase was powered by strong demand throughout the country. Rent growth increased at least 10 percent year-over-year in 25 of Yardi’s top 30 metros. National occupancy rates were solid at 96 percent.
On a year-over-year basis, though, growth continues to slow, decelerating by 50 basis points in June to 13.7 percent – some 130 basis points off the February peak of 15.2 percent.
“The multifamily market is starting to show signs of deceleration in June but is still performing at extremely high levels. Year-over-year rent growth was down 50 basis points from May. While rent growth in 2022 is still higher than any previous year on record, it is the fourth month in a row year-over-year rent growth declined,” note Yardi Matrix analysts.
Yardi Matrix said rents are forecast to increase at slower rates for the rest of 2022 as the economy “cools off.”
Inflation rates will take a while to ebb, “causing consumers to cut into savings and their ability to afford increasing rental rates will lessen as the year goes on,” states the latest report.
Meanwhile, rents in the single-family build-to-rent (BTR) sector continue to grow and reached another all-time high of $2,071 after climbing $23 in June. Its year-over-year growth dropped by 90 basis points to 11.8 percent.
Source: GlobeST
