Rent prices rebounded in January and are off to a positive start in 2025, according to the Yardi Matrix January report.
“After a weak second half of 2024, multifamily advertised asking rents rebounded in January,” Yardi Matrix writes in the report. Industry executives at the National Multifamily Housing Council’s annual meeting “expressed hope that demand will hold in the new year, while concerns abound about interest rates and the new administration’s economic policies.”
Will Demand Repeat 2024 Performance?
Yardi Matrix recorded roughly 400,000 units absorbed in 2024, one of the highest years on record. “January’s performance is an encouraging sign, and many of the drivers of apartment demand still appear to be in place,” Yardi Matrix says.
The report cites the continuing strong job market as well as the decline in percentage of young adults living with parents which rose sharply during the pandemic.
Apartment retention rates continue to be very strong because of the lack of homes for sale plus high mortgage rates.
Mike Carney, a vice president of investment research at Heitman, said during the research panel at last week’s NMHC Apartment Strategies conference that move-outs to homeownership are at all-time lows in his firm’s property portfolio.
Despite strong demand, advertised rent growth is negative in the large number of deliveries in fast-growing markets such as Austin, Raleigh-Durham, Charlotte, Nashville, Denver and Phoenix. Occupancy rates in those markets is falling.
Highlights of the report
- The multifamily market started the year on a positive note, breaking a six-month streak of declining rents. The average U.S. advertised asking rent increased $3 nationally in January to $1,746, while year-over-year rent growth rose by 20 basis points to 0.8%.
- Market players at last week’s National Multifamily Housing Council annual conference were generally optimistic that 2024’s strong demand will continue. However, there are headwinds with the economy and interest rates that will provide challenges.
- Single-family build-to-rent rental rates also rebounded after several down months. SFR BTR advertised rents increased $5 month-over-month in January to $2,157, with year-over-year growth improving 20 basis points from last month to -0.2%.
Read the full Yardi Matrix report here.
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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