Job growth, immigration and high mortgage rates fuel apartment market
SANTA BARBARA, Calif., June 5, 2024 – The U.S. multifamily market’s performance in May reflected a balancing act between steady demand and robust supply growth, according to the latest Yardi® Matrix National Multifamily Report.
The average U.S. asking rent gained $6 to $1,733 in May, up 0.6 percent year-over-year (YoY), marking the fourth consecutive month of increases. For the third straight month, occupancy continued unchanged at 94.5 percent in April, for a 0.6 percent YoY decline.
Markets in the Northeast and Midwest continued to lead rent gains, headed by New York City at 4.8 percent YoY. Austin posted negative rent growth of 5.8 percent, while most other Sun Belt metros posted rent contractions of 2.4 percent or less.
National rents rose 0.3 percent month-over-month in May, performing slightly better in the Lifestyle segment (0.4 percent) than Renter-by-Necessity (0.3 percent).
Investment activity remained tepid, with just $19.3 billion of multifamily transactions completed nationally through mid-May, 24 percent below last year.
“Opportunities are still available, but investors may have to search harder or move out of comfort zones into segments such as distress, ‘hidden gem’ markets and niche property types,” states the report.
The single-family rental market continued to outperform multifamily, with rents up $6 to $2,166 in May, while YoY growth decreased 10 basis points to 1.4 percent. Build-to-rent is increasingly attractive to institutional investors due to greater construction quality control and efficiency of on-site management.
Gain more insight in the new Yardi Matrix National Multifamily Report.
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