Monthly apartment rents might not be rising as quickly as they once were. But demand for apartment units remains strong across the United States, with this sector’s absorption numbers remaining healthy.
Those are two of the key takeaways from the latest research from Yardi Matrix.
Rents are stagnant today, with advertised monthly apartment asking rents declining by $3 to an average of $1,748, according to the latest Yardi® Matrix Multifamily National Report.
And while rents are higher this year than they were at the same time last year, they’ve grown at an extremely slow pace. Yardi Matrix reported that year-over-year growth in rents remained modest at 0.9%, consistent with the range of 0.7% to 0.9% rent growth that the company has been charting since the beginning of the year.
On the positive side, demand for multifamily housing among renters remains strong. Yardi Matrix reported that 329,000 apartment units have been absorbed this year through September of 2024. That figure puts the multifamily market on track for one of its stronger recent years.
Despite the rise in absorption, though, a jump in the number of new apartment deliveries has meant a slight drop in the U.S. multifamily occupancy rate. This rate fell to 94.7% in October, down 10 basis points from previous months.
The performance of the multifamily sector continues to vary by region. In markets such as the Northeast, Mid-Atlantic and Midwest, rent growth remains strong, with the top 11 metros for rent increases concentrated in these areas. High supply levels in the Southeast and Southwest, which have seen significant new deliveries, have led to softer rent growth in these regions.
The single-family rental market also faced challenges in October, with monthly advertised asking rents dropping $8 to $2,164, resulting in a year-over-year growth rate of just 0.3%.
In good news for the Midwest, secondary markets saw the highest year-over-year rent growths in the country in October. Monthly rents rose by 3.7% in Detroit and Kansas City, Missouri, and by 3.1% in Columbus, Ohio.
Chicago’s year-over-year average monthly apartment rent grew by just over 3%, ranking seventh in the country in October, behind New York City, Detroit, Kansas City, Washington D.C., Columbus and Indianapolis.
