National average rent increases from May to June averaging 1.56 percent nearly doubled the previous record, set earlier this year
SANTA BARBARA, Calif., Aug. 5, 2021 – Driven by demand for high-end apartments, multifamily rents continued to tick up last month, according to industry leading data provider Yardi® Matrix. Strong performance in the sector this summer has prompted Matrix analysts to revise expectations for the remainder of the year.
National average rent increases from May to June averaging 1.56 percent nearly doubled the record average month-over-month increase of 0.88 percent set between April and June of this year. (Percentages are an average of market-level survey data, unweighted.)
“Rent increases have broadly accelerated more quickly than anticipated, and as such our forecasts have largely been adjusted upwards during the short term. Record breaking rent increases will be the norm across metros by the end of the year, but our longer-term outlook remains largely unchanged. In short—market fundamentals are good, and the strengthening jobs market should support continued longer term rent growth,” states the newly released Multifamily Rent Forecast Update.
Gains were concentrated in the non-coastal West and South, with Boise, Colorado Springs, the Tri-Cities, and Wilmington all seeing greater than 3.5 percent increases for the month. And many of our top 30 markets also had exceptionally large month-over-month rent increases: Phoenix, Tampa, Raleigh, Orlando, Atlanta, Denver and Austin all recorded gains of over 2 percent.
The primary drivers of the extreme rent increases are lifestyle apartments buildings classified as “upper mid-range.” Rents in these categories have seen an average rent increase of over 7 percent since the beginning of 2021. While workforce housing is not seeing such rent jumps, upward pressure on lower-end wages should provide strong support for continued gains in Class B and C housing as the pandemic recovery continues. Gain more multifamily market insights from the new rent forecast.
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.
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