March saw the largest multifamily rent gain in nearly two years, providing some fuel against the idea that too much building has led to an oversaturation of supply.
Average rent nationwide grew by $8 to $1,721 in March, according to Yardi Matrix. That’s a 0.5% uptick that’s not far off from the 0.6% average increase for the month in the five years before 2020. Year-over-year growth, meanwhile, is up by 30 basis points to 0.9%. The strong figures suggest that normal seasonal patterns are coming back after the uncertainty and unevenness that have pervaded during the COVID era and beyond.
Major markets in the Midwest continue to top Yardi’s rent growth rankings as affordable prices in the region continue to drive multifamily strength. New York topped all metros with a 5.0% year-over-year gain, but the next three cities were all in the Midwest: Columbus, Ohio (4.5%); Kansas City, Missouri (3.7%); and Indianapolis (3.5%).
Negative rent growth, meanwhile, is cooling in many cities that had seen big slides in rents for the last few months. For many of those cities, significant supply growth has been the culprit in receding rents; Orlando, for instance, has seen its total stock up by over 4% in the last year, but saw rents up by 1.4% monthly in March. Similarly, apartment supply in Charlotte had risen by 5.5% over the past 12 months, but rents were up by 1.3% month over month. Rents are still down year over year in both cities, but among Yardi’s top 30 rental hubs, rents in just one — Austin, where rents are down 5.9% from March 2023 — are down by 3.0% annually.
In fact, short-term rent trends in cities where rent growth still lags are currently encouraging. Thirteen of Yardi’s top 30 cities did have negative rent growth over the past year. But just four had negative rent growth over the first quarter, and just two (Baltimore and Nashville) were negative month over month in March.
