Apartment Rent Growth Following Seasonal Trends

Apartment rent growth has been positive and even negative the past few months, and now, you could even call it aloof.

That’s what RealPage said for February, which saw a 0.2% increase year-over-year and month-over-month basis.

That “negligible” increase, however, does represent the largest monthly increase dating back to June 2023, which suggests that “seasonal movement in rents – though muted – appears to be following historical trends.”

RealPage can also call the trend flat, as monthly rent change added up to a collectively unchanged rate in the previous 11 months.

“Muted rent growth is expected to continue throughout 2024 as supply continues to put downward pressure on rents,” RealPage said.

It also reported that apartment occupancy held steady at 94.1% in February, the third consecutive month at that rate, indicating a state of stabilization.

“The current 50-year high in apartment construction will no doubt pose a headwind to occupancy through the remainder of 2024,” according to the report.

Supply remains a driving force behind markets seeing the deepest rent cuts. Austin, Jacksonville, Nashville, Orlando, Phoenix, Salt Lake City, and Raleigh/Durham all ranked in the bottom 10 for rent change performance among major markets last month.

Rent in Austin fell the most at 6.7%. It is expected to grow its total apartment inventory by an “enormous” 11.2% in 2024.

Salt Lake City and Nashville each grew total inventory 7% or more in 2023. Areas with more modest apartment construction continued to post the highest rent growth in February.

The Midwest and the Northeast regions recorded effective asking rent changes of 2.8% and 2.7%, respectively, in the year-ending February 2024, both easily outpacing the national norm of 0.2%.

Virginia Beach, Washington, DC, Cincinnati, and Milwaukee – all relatively low-supply markets that grew total inventory below the national norm in 2023 – led the nation for apartment rent growth as of February.

Three of the nation’s 50 largest markets – San Francisco, West Palm Beach, and Virginia Beach – have seen local occupancy rates increase modestly year-over-year.

It and Virginia Beach are the only two major markets nationwide to post improvement in both rents and occupancy year-over-year in February, according to RealPage.

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