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Rent growth continues to recover to pre-pandemic levels and has even outperformed historical growth. All across the country, rental prices are going up. In August, it increased by an incredible 10.3% on a year-over-year basis. This is the first time there was a double-digit increase in the history of the dataset of the Yardi Matrix National Multifamily Report.
Overall rent growth increased by $25 to $1,539 a month. The recovery in rent is widespread and seen in nearly all metro areas tracked by the report. It is driven by fuel growth, excess savings, and a return to urban areas after many people left due to the COVID-19 pandemic. This shows that the national rental market continues to grow and shows no signs of slowing down. This is great news for landlords across the country.
“The rebound is no longer concentrated in tech-hub metros in the Southwest and Southeast, although some year-over-year numbers seem inflated as they are comparing current rents to last summer when many metros were struggling,” the report also said.
Other report highlights included:
- Tech-hub metros continue to lead the nation in rent growth.
- Fast-growing tech-hub markets outperform other areas. Phoenix grew by 22%, Tampa at 20.2%, and Las Vegas grew by 19.2%. These areas benefited from solid job growth paired with excess savings.
- All top 30 metros had positive year-over-year rent growth for the first time since the beginning of the pandemic.
- Single-family rents continue to grow at an even faster pace than multi-family rents, with national rents up to 13.9 percent year-over-year. Apartments continue to be in demand.
- The pandemic significantly affected Seattle due to the surge in remote work that caused people to leave. However, in August, Seattle rents increased by 3.1%.
- Occupancy rates are up as well, up 1.1% year-over-year.
There are other interesting points in rental growth. In the second quarter of the year, occupied units jumped by approximately 500,000 units. This is the most significant annual increase in data going back to in almost thirty years, since 1993. Rents on newly signed leases also increased by 14.6% in June from a year earlier. This is the highest on record. Occupancy rates also reached 96.5%, matching the previous high in 2000.
The rental market continues to grow, with many Americans looking for apartments. The growth is driven by economic recovery, young people ready to leave their parents' homes, and renters planning to move last year but delayed due to the pandemic. Vaccinated seniors comfortable with downsizing again also contribute to the increasing demand.
All these factors are driving robust rental growth and the construction of more rental units across the country. There is no sign of the rental market slowing down, and it will be exciting to watch where it goes for the rest of the year.
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