National Multifamily Report – Updates from Yardi
According to Yardi Matrix’s most recent study of 140 areas, August is the first month since June 2020 with a moderate rent increase, a pattern that is anticipated to continue until the rest of the year. U.S. rent growth slowed down by 170 basis points to $1,718, or 10.9 percent, on an annual basis, a decrease of $1 month over month. Although decreasing, the nationwide occupancy rate in July was 96.0 percent for the seventh consecutive month. Rents increased by 6.6 percent year thus far, greater than any year previous to 2021. The average rent in the single-family rental market also fell in August by $2 to $2,090, with a 170 basis point reduction in annual growth to 9.5 percent.
Bullish on multifamily and affordable markets
A key reason we remain bullish on multifamily is due to the unaffordable conditions for single-family housing. Currently, a mortgage costs more than renting! A down payment is not affordable for most families. That followed up by higher mortgage payments leaves many individuals and families seeking out affordable living which can be found in suburban apartment complexes.
Rent growth is slowing as a result of migration that is slowing and the economy cooling, as well as the seasonality pattern, which normally moderates in the autumn. Additionally, this year follows a stretch of unheard-before gains. In certain cities, such as Orlando, Miami, and Tampa, where annual rent growth has decreased by 7 to 8 percentage points over the past two months, affordability is starting to become a problem. Demand is increased by the housing market’s reprieve, but the capacity of citizens to pay increases due to growing inflation and a stalling employment market.
Supply and demand leading renters to suburbs
Affordability has led families and individuals into the suburb markets where the most investor advantageous deals are. With the fed showing no signs of lowering rates affordability will continue to be an issue. Rates also impact supply chains, cost of goods, and builder affordability which will create headwinds for new developments. In a debt-based society, renting will continue to be the most affordable way to operate a standard of living.
Reinforcing our focus
Growth Vue has stayed laser-focused on suburbs before and after the pandemic. The post-pandemic shift away from urban areas into suburbs has only increased.
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