Throughout 2021, multifamily headlines reported double-digit rent growth in many US metros. However, recent reports from Yardi Matrix and Apartment List show that rent growth is now slowing down to single digits and even turning negative in some areas. This can be attributed to new supply outpacing demand as well as weakening rental activity during the typically busy spring/summer season.
Yardi Matrix Manager of Business Intelligence Doug Ressler offered a positive outlook on the situation: “New supply is now beginning to see rent-up to meet the growing demand, versus supply imbalance.” Rob Warnock, Senior Research Associate at Apartment List also noted that despite falling year-over-year rents in certain markets they are still 30% higher than pre pandemic levels – indicating historically high prices overall.
Occupancy rates remain stable at 95% (Yardi Matrix) and 93% (Apartment List). The current occupancy rate surpasses pre pandemic levels according to Apartment list but with more units coming online property owners may start struggling for tenants soon enough – especially if year over year rents continue their decline into winter months due an influx of new inventory being delivered this summer according Warnock’s predictions..
Ressler believes that revenue pressures will increase due decelerating rent growth combined with inflationary expenses putting pressure on NOIs while Warnock predicts negative national YoY rents by summer’s end which could potentially last through winter months when rental activity tends towards its lowest point annually
