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Single-family home rents spike amid strong multifamily comeback
Matching pre-pandemic performance, multifamily rents increased by 2.5% year-over-year in May. Performing even stronger last month were single-family home rentals, which increased 7.3% YoY, according to Yardi Matrix.
The single-family rental (SFR) class is a new addition to Matrix’s monthly multifamily reports. The national data set includes more than 90,000 units in 700 built-to-rent communities across the U.S. Institutional investment in the sector has surged in the last 13 years.
Overall SFR rents increased by $14 in May to $1,761, and overall occupancy is strong at 96.6% as of April. California’s Inland Empire, Phoenix and Detroit have large concentrations of SFR homes.
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“The pandemic has fueled even more demand, and new institutional investors are pursuing the sector. The current constraints to purchase a home coupled with demand for more space is fueling strong rent and occupancy growth across metros,” write Matrix analysts.
Meanwhile in the apartment sector, rents grew $12 in May to $1,428, the largest one-month increase since Matrix began tracking its multifamily data set. The 0.8% month-over-month growth rate was the largest since June 2015.
The YoY increase for multifamily puts the sector “almost exactly where rent growth was in March 2020 when the pandemic began spreading in the U.S.,” states the report. “Many metros have recovered and surpassed pre-pandemic rent growth numbers.”
Even struggling gateway markets are making large gains. In New York, rents increased by 3.4% on a month-over-month basis, well above all other top 30 metros. Read the latest Yardi Matrix Multifamily National Report.
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, industrial, office and self storage property types. Email email@example.com, call 480-663-1149 or visit yardimatrix.com to learn more.