More Research Shows Multifamily Rents Are Moderating

In yet another confirmation that the days of sky-high multifamily rents are over, data from RealPage released this week shows that June rents came in lower than earlier this year in more than half of the major US metros the firm tracks.

“Moderating demand and rent growth were widely expected, and it appears to be finally happening,” said Jay Parsons, RealPage’s Head of Economics and Industry Principals. “The open question is whether the market is entering a true slowdown due to inflation or it’s stabilizing toward more sustainable, balanced levels. We tend to take the latter view.”

Renters signing a new lease in June paid 19.2% more than previous occupants of the same units – and RealPage analysts say this could “likely could end up as the peak growth rate – as it marked the first time in 2022 where trade-out rents didn’t jump up significantly from one month to the next.”

Several hot rental markets showed signs of moderation in June, with rent increases clocking in nearly 7 percentage points below highs set earlier this year in West Palm Beach and Phoenix, which has slightly tailed the average in each of the past two months.

Other key markets coming in below prior months’ highs include many cities in Florida, including Jacksonville, Fort Lauderdale, Miami and Tampa, as well as New York, Las Vegas, Memphis, Riverside, San Francisco, Austin and Seattle.

“The markets that have seen the biggest rent increases tend to be more volatile historically – and that impacts both the upside and the downside,” said Carl Whitaker, RealPage’s Director of Research and Analysis. “While we do not expect rent change to go negative in these markets any time soon, it wouldn’t be surprising to see many of them fall below the national averages.”

Reasonable rent growth was also reflected Zumper’s National Index issued last week, with June numbers signaling a slowdown from the “shocking” price spikes over the past year.