Job Growth No Longer Reliable Predictor of Apartment Rent Growth

Job growth, which has been seen as a primary driver of apartment fundamentals, is no longer the gold standard for predicting apartment rent growth, according to a RealPage analysis. Cumulative employment gains typically have positively correlated with cumulative rent growth, meaning the more jobs a market added, the more landlords were able to raise rents in the regions, according to the analysis. But the correlation has changed over the past five years.

“There’s a bit of a positive trendline that indicates job growth translates to some rent growth, but the slope of that line is far less steep,” said RealPage. “And equally important, the relationship between the two variables isn’t much more than random.”