Multifamily fundamentals displayed resiliency in April, as the U.S. average national rent increased and occupancy rates remain relatively unaffected by heavy supply growth, Yardi Matrix says in the April report.
However, investors are growing wary as the U.S. economy shows signs of slowing.
Highlights of the report
- Multifamily advertised rents continued to grow moderately in April as demand coming from a solid labor market and weak home sale market remained consistent.
- The average U.S. advertised rent increased $5 to $1,736, while year-over-year growth fell 10 basis points to 0.9%.
- The national occupancy rate declined slightly, reaching its lowest point in more than a decade at 94.4%.
- However, a slowdown in supply is anticipated in the coming years, as starts have dropped sharply, which will support absorption.
- Single-family build-to-rent advertised rates also increased in April, up $5 to $2,178. Gains were entirely concentrated in the Renter-by-Necessity (RBN) segment, which was up 1.9% year-over year, while the Lifestyle segment was down 0.4%.
“Early data aligns with our forecast of moderate 1.5% rent growth in 2025, but the contraction of the first quarter GDP raises the risk of a potential downturn, which could disrupt otherwise resilient fundamentals,” Yardi Matrix writes in the report.
Rental demand
Rental demand has benefited from high home sale prices and high mortgage interest rates. Home sales have dropped to the lowest level since 2009, according to the National Association of Realtors.
“Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates,” NAR Chief Economist Lawrence Yun said in a release. “Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society.”
Tariff concerns lead to slow down
“Speaking at a recent Marcus & Millichap webinar, Moody’s Analytics chief economist Mark Zandi said the impacts of tariffs include increased costs for consumers and businesses, a negative wealth effect that affects consumers, and the risk that foreign businesses will divert supply chains to exclude the U.S.”
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.