Multifamily rents have maintained a slow pace as advertised rents remained flat in February, with the multifamily market anticipating another year of slow growth, according to the latest report from Yardi Matrix.
“The market faces headwinds in economic conditions that include weak job growth and consumer confidence as well as in demand drivers such as immigration and migration,” the report says.
“While February is typically a slower month, there are longer-term issues of concern. Rents have been essentially unchanged over the past 18 months, while absorption slowed starting in the second half of last year. Domestic migration has slowed and immigration outflows have weighed on household formation. Occupancy rates are negative year-over-year in 28 of the top 30 Matrix markets.
Highlights of the multifamily rents report:
- Multifamily rents remained stagnant in February as the average U.S. advertised rent was unchanged at $1,740, with year-over-year growth dropping 10 basis points to 0.1%.
- February is usually a slow month, but the signals do not point to a strong bump in rents in the spring. Drivers of demand such as population growth, immigration and the job market are not robust, while the occupancy rate and absorption have been weak in recent months.
- As the future of the industry is debated in Washington, rents for single-family build-to-rent properties were unchanged in February at $2,191, while occupancy rates softened slightly. Year-over-year rent growth improved modestly to -0.4%
Lease renewals are strong and renewals positive
Multifamily conditions are by no means dire. Lease renewals are strong and renewal rates continue to be positive, Yardi Matrix says in the report.
“Core markets such as San Francisco and Chicago have bounced back, while Sun Belt markets retain healthy long-term growth characteristics. Equity and debt capital is plentiful, and opportunities exist for core properties and value-add assets with 2020-2022 vintage mortgages that need to be restructured.
“But economic trends signal softness heading into the spring leasing season and raise the possibility that 2026 could shape up to be a weak year for rent growth,” the report says.
