Multifamily rents have defied expectations and kept climbing as asking prices rose $15 in April, an all-time high, as weakening U.S. economic growth has not stopped multifamily rents, according to the latest Yardi Matrix report.
Overall the rate of rent growth remains elevated due to strong demand and a long-term shortage of housing that analysts estimate is between two million and five million units, the report says.
Also single-family monthly rental asking prices topped $2,000 per month for the first time as build-to-rent grows.
Yardi Matrix writes that, “Coming off a record year of growth, in a weakening economy, there was not much doubt that multifamily growth would slow down in 2022, but by how much?
“So far into the spring leasing season, the market is holding up well.”
Highlights from the report:
- Despite the U.S. economy’s recent hiccups, multifamily performance continues to be stellar with asking prices up in April to all-time high of $1,659. Year-over-year growth moderated by 50 basis points but remains high at 14.3 percent.
- Although there is a small handful of weak numbers, multifamily demand and rent growth remain incredibly strong throughout the country.
- “Of our top 30 metros, rent growth was up at least 8.8 percent over the last year in all but one. Rent growth was positive in each of the top 30 metros over the last one-month, three-month and 12-month periods.
- The average single-family asking rent in the U.S. topped $2,000 for the first time and stood at an all-time high of $2,018 in April. Year-over-year growth dropped 110 basis points to 13.2 percent.
Some cautions in the future
Yardi Matrix writes, “Certainly, deceleration will happen, and there are warning signs on the horizon” with the economy.
However, “The demand-supply equation for multifamily should remain favorable even in the event of a modest economic slowdown.
The job market is strong, and household finances remain healthy, as evidenced by a robust increase in consumer spending during the first quarter. Higher mortgage rates have put a crimp in the for-sale housing market, which is likely to keep some renters in apartments, while household formation growth is expected to remain strong,” Yardi Matrix says.
Build-To-Rent Single-Family Rentals Grow
“Rapidly rising house prices and increasing interest rates are keeping homeownership out of reach for some potential buyers, while others are losing bids to the growing competition from institutional investors.
“The increasing preference for suburban housing has added to demand for single-family rentals. New development is on the rise as more and more investors enter the sector, though that will be tested as development and borrowing costs increase,” 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.