The average monthly national rent hit $1,513, topping the $1,500 mark for the first time in 150 metros that were reviewed, according to the National Apartment Association (NAA).
In addition to the average national monthly rent increases, occupancy and demand are also at all-time highs.
“According to separate reports from RealPage, all three have surged forward to levels last recorded in at least the early 2000s,” the NAA says in the report.
“I think we’re going to see increases for the next 12 to 18 months,” said Robert Pinnegar, president of the National Apartment Association, in an interview with The Washington Post.
“We’ve never had three generations in the rental housing space, at least not in the numbers we’re seeing now,” Pinnegar said.
Here is what is going on with those three indicators:
- NAA reported that nationally, asking rents increased 2 percent in June and are up 6.3 percent year over year—the largest 12-month growth since 2001.
- Occupancy is at 96.5 percent, the highest it has been since the later part of 2000.
- Demand also skyrocketed in the second quarter from the same time last year, with the biggest quarterly jump in RealPage’s database dating back to the early 1990s.
The RealPage report says of the 150 largest metros reviewed, 113 saw an annual rent growth increase of least 5 percent. Larger locations with at least 100,000 apartment homes—Phoenix, Las Vegas and Atlanta, among others—witnessed double-digit annual rent growth.
New apartment construction continues in many parts of the country. It is unclear what the impact of new apartments coming online will be on demand in the future.
Greg Willett, RealPage economist, said in the report that annual growth in effective asking rents comes in at more than 10 percent in 53 of the country’s 150 largest metros, including 13 spots where year-over-year price increases are at 15 percent or more.
Willett said Boise, Idaho posts the most aggressive annual rent growth in that 150-metro group of markets, with pricing there up 21.2 percent. In larger cities with at least 100,000 apartment units, Phoenix registers 19.2 percent annual rent growth, and Las Vegas rents are up 16.7 percent. Other big markets recording yearly price increases that top 15 percent are West Palm Beach, Riverside/San Bernardino and Tampa.