March saw national rents rise slightly for the second month in a row, according to Apartment List’s April report.
While the last two months have seen some rent increases, overall national year-over-year growth remains negative at -0.4 percent.
But it is slowly inching back toward positive territory the report says.
“Year-over-year rent growth has now been negative since June 2023, but in recent months, there are signs that a return to positive growth is on the horizon.
“In dollar terms, the national median monthly rent now stands at $1,384, up $8 per month compared to last month, but down $5 compared to March 2024,” according to the report from the Apartment List Research Team.
At the local level, 82 of the nation’s 100 largest cities saw rents rise in March. On a year-over-year basis, rent growth is now positive for a majority of large cities (59 of the top 100).
“Our national index remains negative largely due to steeper declines in a concentrated set of Sun Belt metros that are rapidly expanding their multifamily inventory; these include Austin (-6.3 percent year-over-year), Denver (-5 percent), and Raleigh (-2.9 percent),” Apartment List researchers write.
Multifamily vacancy rate hits 6.9%, a new peak
“Our national vacancy index now sits at 6.9 percent, the highest reading in the history of that monthly data series, which goes back to the start of 2017.
“After a historic tightening in 2021, multifamily occupancy has been slowly but consistently easing for over three years amid an influx of new inventory,” the report says.
As new apartment completions decline, the vacancy index could begin to tighten again, “but for now, we’re still seeing vacancies rise, even as rent declines gradually moderate,” the report says.
List-to-Lease time comes down from all-time new high
The shortening of list-to-lease time over the past two months is in line with the seasonal return to positive month-over-month rent growth “that we’ve observed in tandem.
“That said, this is still the highest time on market reading that we’ve seen in March of any year going back to the start of 2019, when the data series begins. Units are currently sitting vacant for 3 days longer than they were at this time last year, and for 10 days longer than they were in March 2022 when the market was just beginning to loosen. The influx of new supply is resulting not only in a growing number of vacant units, but also in an increase in the length of time those units remain unoccupied,” according to the report.
Rents rise in March conclusion
The report says demand for rentals going forward “remains a bit more uncertain, and will likely hinge on broader macroeconomic conditions. Currently, it appears likely that 2025 will see a return to positive year-over-year rent growth, but that positive growth is likely to be modest,” according to the Apartment List Research Team.
Read the full April report here.
