Multifamily growth met expectations in the first half of the year, Yardi Matrix says in the June report.
While rents continued to rise in June, increases were modest compared to the post-pandemic boom.
“The first half of 2024 is in the books, and multifamily performance was encouraging,” the report says. “Given the market environment, a moderately positive result is a win.”
Highlights of the report
- Multifamily growth and performance remained healthy in June, as strong demand is largely keeping up with rapid supply growth. The average U.S.-advertised rent increased by $4 to $1,739, while year-over-year growth fell by 20 basis points to 0.6%.
- Although the market has headwinds such as above-trend expense growth and a large number of deliveries in some metros, absorption is steady due to strong employment gains, the low unemployment rate, foreign immigration and weak home sales.
- The single-family rental market experienced its first hiccup of 2024, with the average advertised rent declining by $3 in June to $2,166, while the year-over-year growth rate fell 30 basis points to 1.1%. Occupancy rates remained high at 95.4% in May.
The job market continues to be strong and the housing shortage is still with us along with high interest rates, all of which means there are renters continuing to rent because they cannot afford to buy or find a house to buy.
Some cities saw modest rent gains in June
Monthly rent gains in June were led by New York (1.1%), and Chicago, Kansas City and Portland (all 0.9%).
Eight of the top 30 metros posted modest declines, with the largest drop recorded in Austin (down 0.8%).
The expense-growth challenge
The 8.1% average increase in total expenses over the last two years was more than double the 3.4% average growth rate of the previous four years.
“The upshot is that if expense growth does not moderate, consequences will include rising mortgage defaults and a curtailment of needed new development. For owners, improving operating efficiency by streamlining processes and implementing new technologies is essential,” the report says.
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.
