Rent prices inched upward for the second month in a row in August, with an average monthly increase of $1 nationwide, according to Yardi Matrix.
The commercial real estate analytics firm’s latest National Multifamily Report revealed that multifamily rents grew to $1,463, marking the second straight month of growth since the pandemic took hold in the U.S. in March.
Year over year, rents remain slightly depressed, with August’s national rent price down 0.3% from the same month in 2019, unchanged from July.
Secondary markets continue to outperform larger primary metros in rent growth, a byproduct of shifting consumer tastes away from density as the pandemic stretches on. Consider that among the country’s top 30 markets, Indianapolis topped the list in both month-over-month rent growth (at just over 0.8%) and year-over-year rent growth (3.5%). But comparing Indianapolis to the rest of the non-top 30 markets tracked by Yardi yields 16 secondary metros that performed much better on a year-to-year basis, including Huntsville, Alabama (5.7% rent growth year-over-year) and Boise, Idaho (5.1%). Even in state, Indiana’s capital is surpassed in rent growth by Fort Wayne (5.0%).
On the flipside, many larger markets, which continue to suffer considerable rent declines, are weighing down the national average rent price. The three markets with the largest year-to-year rent drops are unchanged from July: San Jose, California (down 5.5%); San Francisco (-5.1%); and Boston (-2.5%). Bay Area neighbors San Jose and San Francisco have notably seen rents plunge since March; overall rents have fallen by $143 in San Jose and $97 in San Francisco during that timeframe.
Meanwhile, rent collections have remained fairly strong despite recent declines. According to the National Multifamily Housing Council (NMHC) Rent Payment Tracker, 92.1% of apartment households made a full or partial rent payment by August 27, down 1.2% from July and down 1.9% from August 2019.
Yardi’s report, however, echoed the NMHC in calling for additional support from the government for renters, who continue to bear the brunt of the economic distress from the ongoing COVID-19 crisis. The additional unemployment benefits initially enacted during the onset of the pandemic expired in July, while another one million workers filed for unemployment benefits during the week ending August 22.
“Collections have yet to decline a material amount,” Yardi’s report said, “but if unemployed Americans are left without additional stimulus in the coming months, we could see a different story play out in the fall and winter months.”
