The multifamily market produced encouraging rent gains in March, its strongest performance in 20 months, writes Yardi Matrix in the March Multifamily Report.
“The market appears to be settling into normal seasonal patterns, as demand is holding up despite challenges posed by the economy and heavy supply growth in the Sun Belt,” the report says.
Normal seasonal patterns appear to be returning
The report says there should be some “level of comfort” now for many who had been worried about the multifamily sector’s performance in 2024.
“It appears that normal seasonal patterns are returning after several years of unconventional performance that started with the pandemic lockdowns in the spring of 2020,” Yardi Matrix says in the report. Rents are also rising, even in markets with lots of new apartments coming online, the report says.
Highlights of the report
- S. multifamily rents in March recorded their largest gain in 20 months, signaling a normal seasonal growth pattern. The average U.S. asking rent rose $8 during the month to $1,721, while year-over-year growth increased by 30 basis points to 0.9%.
- While 13 of the metros in the Matrix top 30 have had negative rent growth over the past year, the situation is improving. Only four metros recorded negative rent growth over the first quarter and only two were negative in March.
- Single-family rents also had a good month, increasing by $9 in March to $2,144. However, the year-over-year growth rate fell 20 basis points to 1.2%. Similar to multifamily, high-supply markets including Austin, Orlando, Phoenix and Dallas, have seen rent growth soften.
Conclusion
“While one month of data doesn’t constitute a trend and rent growth likely will remain constrained due to affordability and new supply, the tone early in 2024 is encouraging,” the report says.