Multifamily rent growth hits two-year high in February, rising 3.6%

A $2 rise in average U.S. rents in February 2019 and year-over-year growth of 3.6%, the highest since late 2016, point to the multifamily industry’s continuing strength, according to a report from Yardi Matrix.

A February survey of 127 major U.S. real estate markets shows that demand, bolstered by a job market with low unemployment and accelerating wage growth, shows no signs of slowing.

Demand is most pronounced in metros with strong population gains and healthy job growth. Rents averaged $1,426 for the month.

The latest numbers “are evidence that the market has strength to perform well for a while, even if the economy or other commercial real estate segments slow down,” the report says. “Occupancy rates have ticked down slightly, but absorption has been no problem.”

February’s year-over-year rent growth leaders were Phoenix, Las Vegas, Sacramento, Calif., Atlanta, and California’s Inland Empire. View the full report.

U.S. multifamily rents rose $2 in February to $1,426 and year-over-year growth remained at 3.6%, as January was revised upward from 3.3% to 3.6%. Annual growth is the highest it has been since late 2016. Rent growth has steadily increased since bottoming at 2.2% in the fall of 2017. The consistent growth is a sign of the strength of the sector’s fundamentals and an indication that the cycle has a ways to run. 

The desert Southwest continues to lead our rankings of top markets, as Phoenix (8.0%) and Las Vegas (7.9%) charge ahead. The gap between the top two markets and the rest of the nation is expanding, as well. Sacramento (5.1%) ranks third, with growth nearly 300 basis points less.