The Five-Year Forecast for Apartment Rent Growth
Portland and Greenville have been identified as outperformers.
The long-sliding rent growth environment nationally continues, but will improve as 2024 moves along and then accelerate in 2025, according to new data from Markrr.
US multifamily historical year-over-year (YoY) rent growth was -2.1% in Dec 2023 – the eighth month in a row it measured negatively.
Markerr uses machine learning techniques in its forecasting.
However, Markerr forecasts a 1.9% rise across the top 100 markets over the next year. The following year, it sees 7% growth before moderating. The 5-year CAGR at the national level is forecasted to be 2.2%.
For starters, Markerr’s top markets, based on 5Y CAGR, include Knoxville, Tenn.; Portland, Maine; and Greenville, S.C. Two New York markets not named NYC – Albany and Syracuse – also made the list.
Home prices, single-family permits, and population growth are boosting Knoxville, which is subsequently having to overcome multi-family permits and historical rent as downside factors.
It’s been a tough ride for the recently high-flying Sunbelt markets, which suffered rent growth at -3.6% YoY.
In a reversal, over the next five years on a compound annual growth rate (CAGR) perspective, tertiary markets are projected to outperform the top 100 average, moving up 2.5% over five years while Coastal markets are projected to underperform at just 1.6% growth. Markerr sees the Rustbelt picking up by a relatively solid 2.3%.
Florida’s Cape Coral and North Port are seeing the largest cuts in YoY rent currently.