National asking rents posted their first increase in over seven months in February, according to the latest Yardi Matrix National Multifamily Report. The average U.S. asking rent rose $1 to $1,713 in February 2024, up 0.6% year-over-year (YoY), while occupancy decreased 60 basis points YoY to 94.5% as of January.
Markets in the Northeast and Midwest continued to register rent increases, in contrast to rent contractions in high-supply Sun Belt markets. Of Yardi Matrix's top 30 metros, 13 posted rent declines, and five were down by three percent or more YoY. Occupancy was positive only in San Francisco, up 0.1%.
National Average Multifamily Rents
Yardi Matrix Multifamily Rent Report for February 2024
Rent prices for the Renter-by-Necessity (RBN) segment were up 0.1% while luxury Lifestyle rentals stayed flat. The biggest dips were in Austin, Texas, and Raleigh, N.C. Rents in both segments dipped in these cities (down 0.4% in RBN and 0.6% in Lifestyle for Austin; down 0.4% in RBN and 0.5% in Lifestyle for Raleigh). Most other markets remained stagnant or saw minor fluctuations.
New apartment construction seems to be cooling the rental market in some areas. Cities with a recent surge in new units, like Austin, Miami, and Charlotte, are experiencing the steepest declines in rent and occupancy. Conversely, cities with less construction are seeing healthy rent growth. In fact, out of eight major cities with minimal new construction over the past year, only Las Vegas has seen rents decrease.
While multifamily rents generally show signs of stability, factors including supply, demand, regional metrics and affordability will determine the market's 2024 performance. Occupancy is likely to continue to decline, with one million new rental units expected to come online through the end of 2025. Already, heavy deliveries in Sun Belt and Southwest metros have eroded rent growth, with more construction underway.
"While high-demand markets are likely to record weak rent growth over the next year or two, the seeds of a rebound have been planted, as starts are declining and deliveries will drop in 2026 and 2027," states the report.
Gain more insight in the new Yardi Matrix National Multifamily Report.
Yardi Matrix offers the industry's most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, student housing, vacant land, industrial, office, retail and self storage property types. Email [email protected], call 480-663-1149 or visit yardimatrix.com to learn more.
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