Average U.S. asking rent increased by $23 in October to $1,572, a record high. Asking rents were also up 13.7 percent year-over-year, according to the latest Yardi® Matrix National Multifamily Report.
According to the report, the continued growth is driven by an ongoing surge in demand that started in the spring and has yet to subside. The average U.S. occupancy rate of stabilized properties reached a record-high 96.1 percent in September, up 1.4 percent year-over-year.
Rents were up by 20% or more in almost a quarter of Matrix’s top 30 markets, led by Phoenix (26.3%), Tampa (25.8%) and Las Vegas (23.0%). In 23 of the top 30, rents were up by at least 10%, and in only one metro—Minneapolis at 4.8%—were asking rents up less than 5%. Normally slowgrowth metros including Baltimore (13.0%), Philadelphia (10.7%) and Indianapolis (10.4%) have also experienced rapid gains.
Through September, some 475,000 units were absorbed nationally, topping the previous all-time annual high. Occupancy was equal for lifestyle properties and renter-by-necessity units, an unusual occurrence.
“Since March, the average U.S. asking rent has increased by $179, or roughly the amount of increase over the previous five years combined,” states the report. “The question now is how long before the market begins to decelerate to some semblance of normal growth. If typical seasonal patterns hold, growth will soon recede.”
Historically, rent increases tend to flatten between September and March. Matrix analysts expect that growth should start to slow as short-term factors such as the impact of stimulus funds and pent-up consumer demand are met.
Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, student housing, industrial, office and self storage property types. Email [email protected], call 480-663-1149 or visit yardimatrix.com to learn more.