The apartment market has stayed hot despite some cooling for real estate and the U.S. economy at large, with average asking rents rising by $15 from March to April, according to Yardi Matrix.
The monthly gain — an 0.9% increase that matched the one from March — brought rents to $1,659, another all-time high. The pace of monthly rent growth has slowed since the torrid days of 2021, but gains remain well above the figures seen in any prior year. Since the start of this year, rents have grown by $50, boosted by inventory shortages in both the rental and home-purchase markets.
On a year-over-year basis, rent growth slowed by 50 basis points in April, although it stayed at a strong pace of 14.3%. The pace of rent increases has now remained at 14% or more for five straight months. Asking rents grew by 20% year over year in five of the top 30 metros tracked by Yardi, and by 10% or more in 26 of 30.
Yardi noted that even the metros at the lower end of the spectrum, including Baltimore (9.3% yearly rent growth); Kansas City, Missouri (8.8%); San Francisco (8.8%); and Minnesota’s Twin Cities (4.7%) still posted “reasonably strong performance.” Sun Belt markets remained on top of the rankings for yearly rent-growth rates. Miami, with a 24.6% annual increase, led all cities in April, followed by Orlando (24.1%), Tampa (22.6%), Las Vegas (22.1%) and Phoenix (20.7%)
There is some evidence, however, that demand in the Sun Belt and Western states is softening slightly. All four metros where occupancy rates declined between March 2021 and March 2022 — Las Vegas (down 0.8%), Phoenix (down 0.5%), Sacramento (down 0.5%) and California’s Inland Empire (down 0.4%) — were in these two regions.