The effect is likely to be felt most keenly in increase in deliveries metro areaswith the highest rate of increase—such as Nashville, Austin, Seattle and Charlotte—and in large coastal markets such as New York City where affordability is already a serious issue. “The slowdown in delivery that took place last year offered traditionally supply-constrained markets a further push in growth, and gave markets with concerns about overbuilding some room to breathe,” the report states.

California's capital city has topped the rankings in Yardi Matrix studies of rent growth for some time now, and Sacramento is expected to continue holding the top spot this year, with year-over-year increases of 7.2%. That's due to low inventory growth and demand from a stable and growing job market, as well as the city's proximity to the Bay Area.

Longer-term, Yardi says that renter demand for apartments shows “no signs of slowing. The number of Millennials in the prime 20-to-34-year-old renter cohort will keep growing, while retirees will continue to downsize. Forecasts call for household growth of roughly one million per year for the next few years, and although housing is recovering, rental demand will be fueled by urbanization and other social trends such as fewer cars on the road.”