Multifamily rents increased in March for the first time since summer, according to Yardi Matrix’s National Multifamily Report. The U.S. average advertised rent inched up $5 to $1,750, with year-over-year growth holding at 0.1%.
This signals an improvement as the multifamily market heads into the spring leasing season.
“Rents typically begin accelerating in March, ahead of peak summer moving activity,” noted the report. “So this month’s short-term rent gains, which were broadly distributed across markets, suggest early signs of seasonal momentum. However, the 0.1% year-over-year increase remains the weakest March growth on record, dating back to 2012.”
According to Yardi Matrix, the ongoing supply glut, primarily in Sun Belt markets, with reduced immigration and slower job growth have created persistent headwinds. In addition, the conflict with Iran has introduced an additional weight on economic activity, posing downside risks to growth and adding renewed pressure on inflation.
Year-over-year rent growth continued to be strongest in gateway and Midwest markets in March. New York remained at the top of the list with 4.5% annual growth, followed by San Francisco, 3.9%; Chicago, 3.4%; the Twin Cities, 2.5%; and Kansas City, Missouri, 2.3%. Negative rent growth continued to be seen in many high-supply Sun Belt and Western metros, with Austin, Texas, at -4.1%; Denver at -3.4%; Tampa, Florida, at -3.4%; Phoenix at -3.2%; and Orlando, Florida, at -1.8%.
The national occupancy rate remained steady at 94.3% in March but was down 0.4% compared with the prior year. According to Yardi Matrix, gains were limited, with only Atlanta and San Francisco posting modest increases.
Month over month, lifestyle rents increased 0.3% in March, while renter-by-necessity rents rose 0.2%. Only three of Yardi Matrix’s top 30 markets posted declines—Seattle; Raleigh, North Carolina; and New Jersey. Most high-supply markets saw month-over-month gains last month, including New York at 1%; Austin at 0.9%; and Indianapolis, San Francisco, and Philadelphia, all at 0.8%.
The single-family rental segment, which continues to be under debate in Washington, D.C., also saw increased advertised rents in March, bumping up $5 to $2,202. This is down 0.5% year over year. Occupancy rates averaged 94.5%, down 0.5% from the prior year.