Another Stable Month for Apartments

For the third straight month, national apartment occupancy stood at 94.2% in July. Effective asking rents grew 0.3% during the month, a 10-basis-point increase over July 2023 but below the typical July pace in the 2010s, according to RealPage’s July apartment update.

Apartment rents rose 2.2% year-over-year, in line with the year-to-date 2023 pace, RealPage said.

The use of concessions is leveling off as well in the market. About 14% of units offered a concession in July, about the same as in June. The average discount offered increased slightly to 28 days.

In the West, apartment occupancy was down 20 bps year-over-year in July to 94.6%. That represents a deficit of more than 100 bps below the 10-year norm, said RealPage. Within the region, non-coastal markets including Phoenix, Salt Lake City, Las Vegas and Denver were all below 94% occupancy, while coastal markets including Orange County, the San Francisco Bay Area and San Diego were all above 95%.

In the South, “generationally high supply levels” are impacting rents, although as in the West, market-by-market performance varies widely. Of the region’s 65 key markets, 18 recorded rent cuts month over month and year-over-year, with Florida accounting for 10 of those areas. Texas, Austin and San Antonio recorded rent cuts as well.

Meanwhile, Charlotte and Raleigh/Durham witnessed rent increases during July, marking four straight months of positive month-over-month change for Charlotte and three for Raleigh, said RealPage.

The Midwest helped bolster occupancy rates nationwide, increasing 20 bps from its January occupancy rate to 94.8%. Rents also have increased 2.8% over the past year in the Midwest, leading the nation. The Northeast region is on a similar trajectory with July occupancy of 95.7% matching its January figure while rents were up 2.7% over the past 12 months. Only one market in the Midwest and Northeast regions saw a year-over-year rent cut – Sioux Falls, South Dakota.