Dive Brief:
- The national average multifamily rent rose by $6 in May to $1,733, according to Yardi Matrix’s latest Multifamily National Report. This places the average rent well above the previous all-time high of $1,727, which was set in the summer of 2023.
- Year-over-year rent growth remained unchanged for the second month in a row at 0.6%. At the metro level, the Northeast and Midwest are showing the highest rent growth YOY, led by New York City at 4.8%.
- At the same time, nine Sun Belt metros, including Atlanta, Phoenix and Austin, Texas, made up the bottom of the Top 30, with rent growth at or below -1.5%.
Dive Insight:
Single-family rents rose the same amount from April to May, up $6 to $2,166. While YOY single-family rent growth fell 10 basis points in the last month, the sector is still performing ahead of its multifamily counterpart at 1.4%. Occupancy rates fell by 10 basis points to 95.3%.
Demand for multifamily units remains positive, owing to a convergence of factors, according to Yardi. The economy added 2.8 million jobs over the 12 months ending in April, immigration remains strong and high mortgage rates are keeping potential first-time home buyers in the rental market.
| Market | YOY rent growth, May 2024 | YOY rent growth, April 2024 | Difference |
|---|---|---|---|
| New York City | 4.8% | 4.6% | 0.2 |
| Columbus, Ohio | 3.6% | 3.8% | -0.2 |
| Kansas City, Missouri | 3.4% | 2.9% | 0.5 |
| New Jersey | 3.4% | 3.5% | -0.1 |
| Washington, D.C. | 3.0% | 2.8% | 0.2 |
| Chicago | 2.8% | 2.9% | -0.1 |
| Boston | 2.6% | 2.6% | 0 |
| Detroit | 2.4% | 2.0% | 0.4 |
| Philadelphia | 2.4% | 2.5% | -0.1 |
| Indianapolis | 1.9% | 2.3% | -0.4 |
SOURCE: Yardi Matrix
For the most part, rents are rising in a normal seasonal pattern, according to Yardi. However, large delivery pipelines are driving rent reductions in high-growth Sun Belt markets — a trend expected to continue through the end of 2025. While absorption is strong in each of these markets, supply still outstrips demand. Dallas, Houston, Austin and Atlanta have each seen occupancy rates fall below 93%.
At the same time, inflation and interest rates remain high. Sales activity has fallen 20% YOY, and property owners looking to refinance must do so in a high-rate environment.
“May’s multifamily performance was a mixed bag,” the Yardi report reads, “reflecting the balance of conditions in the market.”
