U.S. multifamily advertised rents declined $1 in September while year-over-year growth improved to 0.7%, Yardi Matrix reports in their September report.
Advertised rents are up 1.4% year-to-date through September, while the third quarter produced positive rent growth for the first time since the pandemic. That’s an indication that fundamentals may be stabilizing after several years of supply-driven weakness, Yardi Matrix reported.
- Despite falling slightly in September, multifamily advertised rents were up 0.3% in the quarter, the first third-quarter increase since 2022. The average U.S. advertised rent dropped $1 to $1,775 in September, with year-over-year growth increasing 20 basis points to 0.7%.
- This report has begun tracking total occupancy, encompassing all properties including those in lease-up, along with stabilized occupancy. The total occupancy rate has risen 50 basis points since January, a sign that new units in the lease-up phase are getting filled.
- The single-family rental build-to-rent market remains stable as home sales flounder. SFR-BTR advertised rates fell $4 in September to $2,245, the first negative month since January, but the year-over-year growth rate rose 20 basis points to 0.8%.
“Performance across markets is also becoming less polarized. San Francisco remains the clear standout, while other gateway markets continue to post solid gains. Meanwhile, previously struggling Sun Belt markets are becoming less negative as supply growth slows. Excluding outlier San Francisco, the spread between the second- and 30th-ranked Matrix markets has narrowed to 6.3 percentage points from 8.4 in January.
“Only two markets now have annual declines of 2% or more, compared with five in January, while average declines among negative markets have moderated to 1.1% from 1.8%,” Yardi Matrix writes in the report.
Stable or improving occupancy in several high supply markets further suggests conditions are gradually rebalancing.
However, “The fourth quarter will be an important test. Rents have declined by an average of $7 during the fourth quarter over the past four years. If rents remain near current levels through yearend, annual growth could finish above 1%, a meaningful improvement from recent years,” the report says.
Read the full report from Yardi Matrix here.
