Outlook remains positive despite deceleration. Worker shortage continues to hinder construction of new units
SANTA BARBARA, Calif., October 5, 2017 – U.S. monthly rents were unchanged month-over-month at $1,354 in September, according to a survey of 121 markets by Yardi Matrix. After a strong first half of the year, when average rents grew by $33, rents have increased by only $1 over the last three months. The rate of growth continues to decelerate, and average rents nationally are up 2.2% year-over-year, the lowest rate since April 2011, based on the report by Yardi Matrix.
While the economy continues to produce up to 200,000 new jobs per month, a scarcity of qualified workers to complete apartment units under construction has affected supply. “The labor shortage is expected to worse in some areas as workers migrate to Houston and Florida to assist in the efforts to rebuild after Hurricanes Harvey and Irma,” the report states.
Despite rent growth deceleration over the last year and a historical tendency to slow in the fourth quarter, “we don’t believe it’s time to turn out the lights on the expansion in the multifamily sector,” the report says. Job growth and social and demographic trends foretell strong demand for the next few years. Capital forces remain healthy as well.
Leaders in year-over-year rent gain for September were Sacramento, Calif., Seattle, California’s Inland Empire, the Minneapolis-St. Paul metro area in Minnesota, and Orlando, Fla.
View the full September Yardi Matrix report for additional detail and insight into 121 major U.S. real estate markets.
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