Yardi Matrix reports “no pain, no gain for multifamily in February” as national rents remained unchanged from February.
“Moderate absorption was matched by an increase in deliveries in some metros. All eyes are on the Federal Reserve and the impact of interest rate increases on job growth and multifamily demand,” Yardi Matrix writes in their February report.
“Multifamily rents are playing a waiting game, as rents have essentially leveled over the seasonal winter slowdown,” Yardi Matrix says.
Highlights of the February Multifamily Rents Report
- Multifamily rents were flat in February, as U.S. asking rates averaged $1,702, unchanged from January. Year-over-year growth continued its downward slide, and is now 4.8 percent nationally, down 70 basis points from the previous month and the lowest level in nearly two years.
- Asking rent growth remains positive year-over-year in almost every metro, but 23 of Matrix’s top 30 metros recorded negative growth over the last three months and 17 were negative in February. Affordability, household growth and deliveries of new stock are key rent drivers.
- The story was much the same in the single-family rental market, as the average U.S. asking rent was flat at $2,071. The year-over-year increase fell by 80 basis points to 3.4 percent, far below the 14.8 percent growth rate a year ago.
- National lease renewal rates fell to 64.0% in December, down from 65.6% in November. Renewal rates are low in metros with high rent costs, such as Los Angeles (43.3%), San Francisco (46.5%) and San Jose (46.5%), where renters are more transient and are shopping for better deals.
The report summarizes that rent performance in the coming months “will hinge not only on demand-supply dynamics at the local level but affordability and the economy.
“Although metrics such as the job market and consumer spending growth remain healthy, the Federal Reserve has resolved to induce job losses to reduce inflation, which will impact multifamily demand,” Yardi Matrix writes in the report.
“Multifamily owners must focus on operating more efficiently, while investors looking to deploy capital will find opportunities arising from distress.”
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.