Update on the Multifamily Market
Thinking about an apartment investment? Despite reports of slowdowns and an oversupply in some markets around the country, a new national report from Yardi Matrix portrays remarkable consistency in the U.S. multifamily industry. Rents increased by $5 in April 2019 as robust job creation continues to drive absorption of about 300,000 new units per year.
Yardi’s latest Multifamily National Report is based on a survey of 127 major U.S. real estate markets and concludes that “there seems to be no reason to think the multifamily juggernaut is going to hit the pause button.”
Highlights of the report include:
- The average rent in April was $1,436.
- Year-over-year rent leaders were Las Vegas, Phoenix and Atlanta. Tech hubs such as Raleigh, Charlotte, Austin and Tampa also showed strong growth.
- The occupancy rate dipped only about 10 basis points despite the new supply coming online. The national occupancy rate for stable properties is 94.8 percent.
- Rents increased in all of the top 30 markets over the past year. At 0.6 percent, Houston was the only market with a gain of less than 1.4 percent.
- The apartment market is being driven by the strong economy, which is pumping out 200,000 or so jobs each month, encouraging household formation by young workers. It’s also being driven by a slowing of homeownership; the homeownership rate dropped 60 basis points in the quarter.
All of these factors bode well for the apartment market, at least in the short term – and for investors.