Strong occupancy growth continued to boost multifamily in February as the market defied expectations, according to the latest report from Yardi Matrix.
“Multifamily demand remained strong in February, as the industry prepares to enter the spring leasing season. Occupancy rates are extremely high in markets across the country, with housing demand outstripping supply,” Yardi Matrix writes in the latest report.
The report also shows rent growth once again rose to record levels, although it cautions “the pace is likely to decelerate in coming months.”
Some highlights from the report:
- Multifamily rent growth continues to exceed normal seasonal patterns, as average U.S. asking rents rose $10 in February to yet another record of $1,628. Year-over-year growth increased to 15.4 percent, a new peak and up a full percentage point from January.
- The solid demand that created last year’s explosive rent growth seemingly has not been satiated. Nationally, occupancy rates are up 120 basis points year-over-year. Occupancy growth is strong in Texas and Florida metros, but also in gateway markets that lost residents during the pandemic.
- Multifamily’s exceptional rent performance is matched by single-family rentals. SFR rents increased by 14.9 percent year-over-year through February, while the national occupancy rate remained the same.
The continued strong performance of multifamily and occupancy growth highlights the continued problem of the long-term shortage of housing in the U.S.
“In January 2021, occupancy rates were 95.0 percent or higher in just 13 of the top 30 markets, but a year later only two of the top 30 are below that level,” the report says.
The report points out that some of the occupancy growth has been the markets that suffered the most during the pandemic, such as New York and San Jose.
However the report cautions on rent growth.
“Rent growth is likely to start decelerating soon relative to the big increases that began in March 2021, but demand shows little sign of slowing,” the report says.
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.