Multifamily rents continue to rise slightly as the market absorbs the steady supply of new apartments, Yardi Matrix says in the April National Multifamily Report.
“Although rent growth remains moderate, there are plenty of encouraging signs in the data. Most importantly, demand for apartments continues unabated due to high levels of household formation stemming from the strong job market, large numbers of immigrants and ongoing migration to the South and West,” the report says.
Also, the absorption of new apartment units was strong around the county and “particularly in high supply metros where there is concern about supply’s impact on occupancy rates and rent growth.
“Absorption is not near 2021’s peak levels, but 2024 started at a pace that would be on par with an average year and slightly ahead of 2022 and 2023 levels,” Yardi Matrix says in the report.
Highlights of the report
- April heralded good news for the multifamily market, as rents rose solidly for the second straight month. The average U.S. asking rent increased by $6 to $1,725, while year-over-year growth was unchanged at 0.7%.
- Multifamily faces challenges that include increased expenses and insurance costs plus higher- for-longer interest rates, but post-pandemic demand for units has remained consistent, leading to healthy absorption numbers in most locales.
- The single-family rental market also had its second straight strong month, with rents increasing $9 in April to an all-time high of $2,154. The year-over-year growth rate rose 10 basis points to 1.3%, and occupancy rates were unchanged at 95.4%.
Increase in renewal rents
The national lease renewal rate averaged 65.8% in March, a low that has not been recorded in nearly two years. Lease renewal rates were highest in New Jersey (83.8%) and lowest in Los Angeles (56.1%).
Looking ahead
While apartment demand has cooled after 2021’s record 620,000 units, it remains consistent.
“That’s good news with supply growth at multi-decade highs. Over the next year or two, it may take longer to lease up new properties in high-supply Sun Belt markets, and owners may have to offer concessions to attract and retain tenants, but if demand remains healthy, fundamentals will return to normal after new stock is digested,” the report says.
Read the full 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.
