Rent deceleration is not surprising due to increased supply but raises long-term questions
SANTA BARBARA, Calif., June 3, 2017 – Average U.S. multifamily rents rose $4 in May to $1,316, according to a survey of 121 markets by Yardi® Matrix. While this represented a 1.5% increase on a year-over-year basis and the third consecutive month of rent growth, it was also the 13th straight month that the year-over-year growth rate decreased.
“Driving the rent deceleration is the increase in supply nationally combined with issues that vary by market, such as slowing demand or affordability,” notes the most recent Matrix Monthly. Although the slowing growth rate is not unexpected following several years of outsized increases, it raises questions about how low the rate of growth will go and how long growth will remain stagnant.
The leaders in year-over-year rent growth in May were the California metros of Sacramento, the Inland Empire and Los Angeles, followed by Minnesota’s Twin Cities and Orlando, Fla. Rents fell in several metros including Houston; San Jose, Calif.; San Francisco; Austin, Texas; and Boston.
View the full May report for additional detail from 121 major real estate markets.
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