U.S. multifamily advertised rents rose in April but at a lower rate than the usual rents seasonal bounce, and they are negative compared to a year ago, Yardi Matrix says.
However, on a positive note, investors can still find pockets of opportunity in strong submarkets and in distressed and value-add assets.
Multifamily market continues to face headwinds
The multifamily market continues to face headwinds that could weigh on the pace of rent-growth recovery.
“The University of Michigan’s consumer-confidence survey hit a record low in April, job growth remains soft, and the ongoing Iran conflict has contributed to elevated energy prices, which are constraining household budgets. With negotiations with Iran appearing stalled, there is limited visibility on when these pressures may ease,” Yardi Matrix writes in the report.
The report says even considering these broader economic conditions, the volume of new rental housing supply working through the lease-up phase remains the main reason for slow rent growth.
At the same time rent growth and lease up is slow, “demand has softened, as absorption has been stagnant in the past few quarters. With population growth moderating, migration trends cooling and the economic outlook remaining uncertain, a near-term acceleration in demand appears unlikely. As a result, rent growth is expected to recover gradually as supply normalizes and excess inventory is absorbed over time,” Yardi Matrix writes in the report.
Multifamily Rents Gain in April, but Fall Year-Over-Year
- Multifamily advertised rents increased slightly in April but remain less than they were a year ago. The average U.S. advertised rent increased $4 in April to $1,758, with year-over-year growth falling to -0.2%.
- Advertised rents are negative year-over-year in almost two-thirds (19) of the Matrix top 30 metros. Gains continue to be concentrated in primary markets such as New York, Chicago and San Francisco and Midwest markets including the Twin Cities, Kansas City and Indianapolis.
- In similar fashion, advertised rents in single-family build-to-rent properties rose in April but are $10 less than they were a year ago. Single-family-rental/build-to-rent advertised rents increased $7 in April to $2,211, with year-over-year growth at -0.5%. The national occupancy rate held firm at 94.5%.
Read the full Yardi Matrix report here.
About Yardi Matrix
Yardi Matrix researches and reports on multifamily, office and self-storage properties across the United States, serving the needs of a variety of industry professionals. Yardi Matrix Multifamily provides accurate data on 18+ million units, covering more than 90 percent of the U.S. population. Contact the company at (480) 663-1149
