Positive rent growth reported in April

New York leads in rent growth

Yardi Matrix reported that national average apartment rent was up $6 in April compared to the revised level of the month before at $1,725 per month. The national average year-over-year apartment asking rent growth was 0.7 percent in April, down 0.2 percent from the rate reported last month.

Rents in the “lifestyle” asset class, usually Class A properties, were down 0.6 percent year-over-year, while rents in “renter by necessity” (RBN) properties increased by 1.9 percent year-over-year. The chart, below, shows the history of the year-over-year rent growth rates for these two asset classes along with the difference between these rates.

rent growth by property class

The chart shows that the year-over-year rent growth rate for lifestyle properties has now been negative for 10 straight months, nearly matching the period of negative rent growth for that class of properties seen in the wake of the pandemic. Rent growth in the RBN class remains positive but at a lower level than seen in 2018 and 2019 when it averaged over 3 percent.

The national average lease renewal rate was 65.8 percent in March. New Jersey continued to be the leader in lease renewal rate with 83.8 percent of renters renewing. Philadelphia remained in second place with a lease renewal rate of 79.4 percent, up 2.0 percentage points from the rate quoted in last month’s report. Kansas City, Baltimore, Detroit, Indianapolis, Boston and Miami all had lease renewal rates of 70 percent or higher. At the low end of the spectrum, the lease renewal rate was 56.1 percent in Los Angeles and 56.5 percent in Austin.

Year-over-year rent growth for leases that were renewed was 4.4 percent in March, down slightly from the rate quoted in last month’s report. Year-over-year renewal rent growth was as high as 10.0 percent in Columbus and as low as -15.4 percent in Los Angeles and -1.4 percent in Austin.

Yardi Matrix reported that the U.S. average occupancy rate in March was unchanged from the level in last month’s report at 94.5 percent. None of the top 30 metros on which Yardi Matrix reports saw occupancy rise during the month and 28 of them saw occupancy decline.

Yardi Matrix also reported that single-family rental (SFR) rents rose $9 in April from the revised level of the month before to $2,154 per month. The year-over-year SFR rent growth rate edged up from the level of the month before to 1.3 percent. Of the 34 metros tracked in the report, 26 saw rents rise year-over-year.

The national occupancy rate for single-family rentals in March rose 0.1 percentage point from the revised level of the month before to 95.4 percent.

Tabulating the data

Yardi Matrix reports on other key rental market metrics in addition to rent growth. These include the average rent to income ratio, the rent growth rate for residents who renew their leases and the portion of residents who renew. The metro averages are included in the tables below, but the report also includes the rent to income ratios for both lifestyle and for RBN properties.

Of the Yardi Matrix 30 metros, the 10 with the largest annual apartment rent increases are listed in the table below, along with their annual percentage rent changes, overall rent to income ratio, rent growth for renewed leases and renewal rate for the month. The data on asking rent growth and rent-to-income ratios are for April. The other data are for March.

Metro YoY asking rent growth % Rent to income ratio % YoY renewal rent growth % Monthly lease renewal rate %
New York 4.6 29.1 5.0 65.5
Columbus 3.8 27.5 10.0 67.3
New Jersey 3.5 29.9 5.9 83.8
Chicago 2.9 29.9 3.5 69.6
Kansas City 2.9 25.6 9.4 71.8
Washington DC 2.8 34.7 4.7 62.5
Boston 2.6 30.4 5.3 70.3
Philadelphia 2.5 30.6 5.4 79.4
Indianapolis 2.3 27.0 6.0 70.5
Detroit 2.0 26.4 5.2 70.7

Yardi Matrix reports most of its statistics for New Jersey for the state as-a-whole. However, it reports rent-to-income data for Northern New Jersey and for Central New Jersey as separate locales. The rent-to-income value for New Jersey listed above is the average of the Northern and Central values.

The major metros with the smallest year-over-year apartment rent growth as determined by Yardi Matrix are listed in the next table, below, along with the other data as in the table above.

Metro YoY asking rent growth % Rent to income ratio % YoY renewal rent growth % Monthly lease renewal rate %
Austin (6.5) 26.3 (1.4) 56.5
Atlanta (3.4) 29.3 3.8 66.4
Raleigh (2.9) 27.6 2.4 67.7
Orlando (2.7) 32.0 5.6 69.2
Phoenix (2.2) 28.9 2.0 63.7
Nashville (1.9) 31.2 3.4 64.4
Tampa (1.7) 30.2 2.9 68.7
Charlotte (1.6) 29.0 3.5 65.7
Dallas (1.6) 26.7 3.6 64.9
Portland (1.5) 31.3 2.3 60.1

The top metros for month-over month rent growth in April were Boston, Detroit, New Jersey and Philadelphia. None of these markets was in the top 4 in last month’s report. The trailing metros were Tampa, Raleigh, Austin and Atlanta. Only Austin was in the bottom 4 in last month’s report.

Looking at SFR markets

Yardi Matrix tracks the top 34 metros for built-to-rent single family rentals. The leading metros for year-over-year rent growth were Boston, Raleigh, Orange County and Indianapolis. The metros with the lowest year-over-year rent growth were Austin, Phoenix, Tampa and Dallas.

This month, 14 of the metros saw year-over-year occupancy increases. The metros with the largest year-over-year occupancy increases were Washington D.C., Lansing, Las Vegas and Tampa. The metros with the greatest occupancy declines were Atlanta, Nashville, Orlando and Los Angeles.

The complete Yardi Matrix report provides information on some of the smaller multifamily housing markets. It also has more information about the larger multifamily markets including numbers on job growth and on completions of new units. It can be found here.