Multifamily Asking Rents Show Slower Growth in June, Occupancy Rates Remain Strong, Midwest Leads The Way
According to the Yardi Matrix National Multifamily Report, multifamily asking rents experienced a year-over-year growth decline to 1.8% in June, marking a decrease of 70 basis points from May. However, the average asking rent saw a $7 increase from the previous month, reaching $1,727. Despite the slower growth, Yardi Matrix analysts note that rents are following a normal seasonal pattern, but they remain below the post-pandemic boom and pre-pandemic trends. In the second quarter, rents went up by $20, or 1.2%, and increased by $23, or 1.4%, for the first half of the year.
Demand for rental units has been robust, maintaining stable occupancy rates at 95%, as reported by Yardi Matrix. The strong demand can be attributed to job market growth, with 1.5 million jobs added during the first half of 2023, and challenges faced by first-time home buyers due to sluggish home sales.
Among the top 30 metros, nine experienced negative growth in June, mostly in the West and Sun Belt regions, where demand has returned to normal levels as new supply enters the market. In contrast, the Northeast and Midwest regions led the year-over-year growth, with New Jersey topping the list at 6.5%, followed by New York at 6.3%, Indianapolis at 6.1%, Chicago at 4.9%, and Boston at 4.7%.
Yardi Matrix has updated the list of top 30 metros to include Columbus, Ohio; Detroit; Central and Northern New Jersey; Richmond, Virginia; and San Diego, while excluding California’s Inland Empire, Orange County, Sacramento, and San Jose, as well as Kansas City, Missouri.
Additionally, single-family rental rates experienced a $5 increase in June, reaching $2,103, but year-over-year growth fell by 80 basis points to 1.3%. The steady demand for single-family rentals is compensating for sluggish home sales, maintaining stable occupancy rates.