Once High-Flying Rental Markets Noticeably Slow

Apartment rents might have peaked last month, given data released last week by Apartments.com in its April 2022 report.

Perhaps more indicative is the number of formerly high-flying rental markets experiencing notable decelerations in rent growth as the month closed, the apartment listing firm said.

The number of markets witnessing rent growth above 20% has declined from eight at the end of 2021 to just four in April, indicating a tempering of rent growth.

“Overall, April saw a slight deceleration of rent growth both nationally and at the market level,” said Jay Lybik, National Director of Multifamily Analytics, CoStar Group.

This includes five markets in Florida, two in North Carolina along with Las Vegas, Nashville and Austin.

Nowhere was the halt to leading high-growth markets more evident than Phoenix, which saw year-over-year asking rents drop from 22% in Q4 2021 to 15.6% at the end of April 2022.

Significant cooling was also found In Atlanta and Orange County, Calif. In 2021, they underwent significant growth, often landing among the top 10 growing markets. In April, Atlanta’s rent growth dropped 370 basis points and Orange County was down 210 basis points in the new year.

Nonetheless, Lybik said Sun Belt markets continue to dominate the top rent growth markets, with the top 10 markets in terms of year over year rent growth located there.

Month-Over-Month Rents Tick Up Slightly Nationally

Those power markets slightly skewed overall national YoY data, but in a month-to-month analysis, the national average rent grew by 0.8%.

At the month-over-month level, the top 10 performing markets are dispersed across the country, a stark contrast compared to the Sun Belt market concentration seen in the year over year rent growth metrics.

Lybik continued, “While the sunbelt markets are still well-represented among the top 10—with Charlotte, N.C., notably leading the monthly numbers—we are seeing a handful of other regions holding strong on a monthly level. 

“Midwest markets like Columbus, Ohio, and Indianapolis, and gateway cities such as Boston and Seattle are also experiencing strong upticks in rents over the past 30 days.”

Lybik said a potentially new story on rent growth could be told given the multifamily housing industry is heading into the spring leasing season.