Once new units are absorbed, rents will rebound in markets where asking rates have fallen behind national average
SANTA BARBARA, Calif., May 9, 2024 – The multifamily market is a tale of two supply scenarios, shows a new special report from Yardi® Matrix.
Of the 134 U.S. cities reviewed by Yardi Matrix, those that recorded substantial growth during the pandemic and are now receiving high volumes of new supply are posting stagnant or falling rents. Nine of 20 markets that saw rents fall since the beginning of the year are in Florida or Texas. Other pandemic high-growth markets like Atlanta, Raleigh-Durham and Salt Lake City are also experiencing lower average asking rents than a few months ago.
Secondary markets in the Midwest, Northeast and South are still posting strong growth in asking rents. Markets with increases higher than two percent include Albany; Milwaukee; Worchester-Springfield; Louisville; Cincinnati; Des Moines; Richmond; Madison; Lafayette, Ohio; Youngstown; Providence; Northern Virginia; Portland, Maine; and Scranton-Wilkes-Barre. Honolulu, where supply is a consistent challenge, marked 5.7 percent growth year-to-date.
“We still expect markets with lots of supply to continue to struggle to realize gains this year, but that is only a supply issue, and once those new units get absorbed all of those markets will be back in good shape,” notes the report.
Rent growth in 2025 will be stronger than this year, and in 2026 even more so, as the current influx of supply to be fully absorbed. Gain more insights in the latest Multifamily Rent Forecast Update from Yardi Matrix.
Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, student housing, vacant land, industrial, office, retail and self storage property types. Email [email protected], call 480-663-1149 or visit yardimatrix.com to learn more.
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