Report predicts record-breaking rent increases to be the norm by year-end
National multifamily rent growth rose 1.56% from May to June – nearly double the record 0.88% month-over-month gain seen between April and June, according to Yardi Matrix’s latest report.
“Rent increases have broadly accelerated more quickly than anticipated, and, as such, our forecasts have largely been adjusted upwards during the short term,” Andrew Semmes, senior research analyst at Yardi Matrix, said in the report.
“Record-breaking rent increases will be the norm across metros by the end of the year, but our longer-term outlook remains largely unchanged. In short—market fundamentals are good, and the strengthening jobs market should support continued longer-term rent growth.”
Data from Yardi’s showed that the rapid growth in multifamily rents was mainly driven by increases in higher-end buildings.
For the May to June period, lifestyle apartment buildings classified as “upper mid-range” increased by an average of 7% since the beginning of the year – more than double the increase seen in the lower tiers (3%).
While workforce housing is not seeing such rent jumps, Yardi said that upward pressure on lower-end wages should provide strong support for continued gains in Class B and C housing as the pandemic recovery continues.
“The delta variant, unfortunately, has the potential to upend individual markets, but with full FDA approval of vaccines expected as early as next month, we should see higher vaccination rates and lower risk of another large negative shock,” Semmes added.