Multifamily demand remained steady in January, with rents leveling off after a fourth-quarter dip, to show a positive multifamily outlook, Yardi Matrix said in their January report.
“The sturdy job market is creating optimism for a soft landing in 2023, though industry players are apprehensive about the growing number of rent control measures and rapidly rising expenses,” the report says.
“All things considered, the performance is a positive indicator for the sector. Going into the year—since it would be impossible to maintain the growth of the last two years—the debate was about how much demand would decline and the impact on rents,” the report says.
Highlights of the report
- After declining in the fourth quarter as growth decelerates, multifamily rents were flat in January. U.S. asking rents averaged $1,701, unchanged from December. Year-over-year growth continues to decline, and is now 5.5 percent, down 70 basis points from the previous month.
- Participants at the annual National Multifamily Housing Council conference in Las Vegas were generally optimistic about demand fundamentals, but concerns centered around issues such as the wave of proposed rent control measures, increasing expenses and high mortgage rates.
- The single-family rental market remained strong amid volatility in the homebuying sector. The average U.S. asking rent increased $1 in January to $2,070, while the year-over-year increase fell by 85 basis points to 4.2 percent.
Rent Growth Steady In Yardi Matrix Markets
The report says that, “Early signs are encouraging. Rents remained consistent during the month in the middle of the seasonally slow winter season.
“And although markets where rents were well above trend in 2022—such as Miami, Tampa, Orange County and Nashville —have come back to the pack, overall growth is steady in most of Yardi Matrix’s top 30 metros.”
Lease Renewal Rates Continue Decline
National lease renewal rates fell to 61.1 percent in November, down from 64.9 percent in October and the lowest level since before the pandemic.
The decline could reflect that tenants facing increases and lower wage growth are starting to shop for lower rents, although the month could be an outlier.
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.
