The US multifamily sector saw average asking rents rise by $15 in April to hit an all-time high of $1,659, leading analysts at Yardi Matrix to say the asset class is in a “can’t stop, won’t stop” phase of historic growth.
The firm’s latest multifamily data shows that year-over-year rent growth moderated by 50 basis points in April but is still high at 14.3%. Rent growth was positive in all 30 metros Yardi tracks in the report over the last month, three month, and 12-month periods, with markets in Florida and the Southwest nabbing the top spots year-over-year. Boston, New York, San Jose, and Philadelphia have been among the top performers as of late.
“Although there are a few weak spots, multifamily demand and rent growth remain incredibly strong throughout the country,” state Matrix analysts in the new report. “Of our top 30 metros, rent growth was up at least 8.8 percent over the last year in all but one.”
The average single-family asking rent in the US also hit a new high in April, clocking in at $2,018 per month. Year-over-year growth for single-family homes slumped 110 bps to 13.2%.
But Yardi analysts don’t expect the sector to continue its winning streak with such fervor in the near term: to the contrary “deceleration is anticipated any month now, due to economic contraction, surging inflation, interest rate hikes and ongoing supply-chain issues,” they note.
Most of the multifamily rent growth last year was driven by affordable secondary markets across the Southeast and Southwest, including the Phoenix, Tampa, Jacksonville, and Orlando areas. Yardi has previously forecast that those Sun Belt regions will continue to see rents tick up, though at a more sustainable rate than in 2021. Southeastern US cities rank high on Yardi’s 2022 rent forecast, led by Tampa (6.6% growth), the Southwest Florida Coast (also at 6.6%), Raleigh-Durham (6.5%), Atlanta (6.2%) and Orlando (6.1%).
The Bay Area is also expected to rebound, with rents predicted to ramp up 6.5% in San Francisco and by 5.5% in San Jose. Other cities across the West that top Yardi’s 2022 rent predictions include Las Vegas (6.5%), San Diego (6.4%), Phoenix (6.2%), the Inland Empire (6.1%), Sacramento (6%), Los Angeles (5.6%) and Salt Lake City (5.6%).