“Further healthy economic expansion could lead to more rate increases in 2017, which would raise borrowing rates and put pressure on historically low property yields,” the report states. “At the same time, the failure to repeal the Affordable Care Act demonstrates that the pro-growth changes in tax and regulatory policy and the increase in infrastructure spending that were envisioned by the market will be (at best) watered down or delayed by process or (at worst) stalled completely due to fractures among the parties in Washington.”

Even so, Yardi Matrix points out that multifamily fundamentals remain basically sound, with new supply being absorbed and rent growth close to its long-term average. “Although rent growth continues to decelerate, market fundamentals are stable and poised to continue in the current growth cycle,” according to Yardi Matrix.

SANTA BARBARA, CA—Multifamily rents finally broke a five-month stalemate in March, with a $6 increase in monthly rents to an average of $1,312, Yardi Matrix said Wednesday. That represents a 2.7% increase on a year-over-year basis, only half the annual growth rate seen at this point in March 2016.

Moreover, Yardi Matrix's latest report points out that the March uptick doesn't represent the start of a lasting upward trajectory. Instead, it reflects reflects a seasonal trend of households relocating when weather conditions become more favorable.

“We maintain the forecast of a 3% increase in rents for the year,” says Jeff Adler, VP at Yardi Matrix. “The economic climate may influence market projections.”

Among the issues the multifamily market will face this year, according to Yardi Matrix's new report, is how demand reacts to changes in the economy. The Federal Reserve once again raised short-term interest rates in March, as the economy continues to produce 200,000-plus jobs per month, while the Consumer Price Index is topping the 2% target rate after an extended period of weak growth.

“Further healthy economic expansion could lead to more rate increases in 2017, which would raise borrowing rates and put pressure on historically low property yields,” the report states. “At the same time, the failure to repeal the Affordable Care Act demonstrates that the pro-growth changes in tax and regulatory policy and the increase in infrastructure spending that were envisioned by the market will be (at best) watered down or delayed by process or (at worst) stalled completely due to fractures among the parties in Washington.”

Even so, Yardi Matrix points out that multifamily fundamentals remain basically sound, with new supply being absorbed and rent growth close to its long-term average. “Although rent growth continues to decelerate, market fundamentals are stable and poised to continue in the current growth cycle,” according to Yardi Matrix.