Multifamily Concessions Remained at Historic High For Second Straight Month
Also, month-to-month leases have ticked up beyond 2020 levels for three consecutive months.
Multifamily rent concessions remained at historic highs in February, even as lease pricing rebounded to pre-COVID levels.
The latest report from MRI Software, which compiles data from more than 1 million market rate units, shows that concession values remained at their peak for the second straight month, compared with February numbers from a year prior.
“I am encouraged by the increase in lease pricing, despite the high concession volumes,” says Brian Zrimsek, industry principal with MRI Software. “This jump is notable, given the ongoing uncertainties about vaccination rates and stimulus packages. Of course, those same uncertainties are driving the popularity of month-to-month leases and prompting residents to stay in place.”
Renewal levels have also rebounded to year-over-year volumes, though month-to-month leases have ticked up beyond 2020 levels for three consecutive months.
“While it is always hard to attribute behaviors to data, this could highlight a population of residents that are unsure about a longer-term renewal, especially if they are behind in their rent and are protected by eviction moratoriums,” the report states. The most recent round of government stimulus contains additional renter protections to the tune of $25 billion in housing assistance.
The report also notes that a higher number of renters are moving in than moving out of units, continuing a trend that began in July.
And from a payment perspective, MRI outlines three key takeaways: first, payment volumes are off year-over-over, with a small uptick from January to February, and a slow decline in the percentage of renter making payments each year continues. For those who are paying, a growing share are using credit cards.
In its most recent Rent Payment Tracker, the National Multifamily Housing Council found 80.4% of apartment renters made full or partial rent payments by March 6, a number that represents a 4.1 percentage point, or 474,942 household decrease from the share who paid rent through March 6, 2020.