U.S. multifamily market gains despite seasonal lull

Bolstered by a positive economic environment, U.S. multifamily rents increased 3% year-over-year in January 2020.

Sixteen of the country’s top 30 markets posted year-over-year rent growth above the national average and none experienced a decline, a new report from Yardi® Matrix shows. The $1,463 rent was $1 below the average for December, but “stagnant or decelerating rents are common during the winter months and could continue” through the first quarter, the report says. The national economy’s resilience continues to sustain “strong and steady” multifamily fundamentals.

Phoenix and Las Vegas maintained their year-over-year rent growth leadership for the 16th consecutive month in January. Sacramento, Calif., California’s Inland Empire and Nashville, Tenn., rounded out the top five metros. Nashville and Charlotte, N.C., the No. 6 entry, have benefited from corporate relocations from higher-cost cities. Boston was the lone Northeastern market in the top 10.

Potential impediments to rent growth this year include new statewide rent control measures and increased local regulation of security deposits and resident acceptance criteria.

National supply deliveries figure to decline this year as “multifamily construction originations are at a five-year low and the increased cost of labor and materials continues to be an issue,” according to the report.

Get the latest in-depth data on employment, supply, occupancy and market rent growth trends in the Yardi Matrix multifamily national report for January 2020.