While MFR industry watchers debate whether the record-breaking pace of apartment rent prices will slow as year-end approaches, recent data released in the Yardi Matrix National Multifamily Report suggests that any conclusions about prices slowing down may be premature.
In October, nationwide asking rents were up 13.4% year over year, marking the highest annualized jump ever recorded by Yardi Matrix. The price surge brought the average U.S. asking rent in October to $1,572 — another record high.
From the end of Q2 2021 to now, the average asking rent rose by $179 — A stunning amount, considering it is roughly equivalent to five previous years of increases combined.
Yardi’s report also looked at the top 30 U.S. markets and found that in nearly one fourth of these metro areas rents were up 20% year over year. Phoenix (up 26.3%), Tampa (up 25.8%) and Las Vegas (up 23%) are striking examples of this trend.
These extraordinary MFR rent gains are a result of this year’s increased demand for apartments. Almost a half million units were rented nationwide by the end of Q3 2021, surpassing 2020’s rental rate for the entire year. This surge pushed U.S. occupancy rates for stabilized properties to 96.1% — another record high.
If past rent-price performance is any indicator, growth should slow down through March of next year. However, according to Yardi, “the combination of pent-up demand, rapid job growth, increase in single-family prices keeping renters in place, long-term shortage of supply, and rapid migration to markets with low-cost housing has created seemingly inexhaustible demand.” Under these circumstances, past seasonal norms might not be reliable indicators of what to expect in the coming year.