New deliveries brake growth rate but economic fundamentals remain strong
SANTA BARBARA, Calif., May 31, 2018 — U.S. multifamily rents rose $4 to $1,381 in May, according to a survey of 127 markets by Yardi® Matrix.
While rents have risen by $14 over the last three months, May’s 2% year-over-year increase represented a 50-basis-point decline from April, the largest one-month drop in more than six years. Yardi Matrix attributes the slowdown to a two-year pattern of rent deceleration primarily caused by deliveries in most metros. The deliveries have “taken a toll on occupancy rates and growth, even in markets with strong demand,” the May report says, noting that deliveries of more than 600,000 units currently under construction will continue to pressure rents.
The report also points out that the economy “is favorable, with steady job growth, near full employment and consumer spending seemingly poised for a boost by the tax cuts. We expect overall demand will hold up.”
The year-over-year rent growth leaders in May remained virtually unchanged from April. Orlando, Fla., again topped the list, followed by Las Vegas, Sacramento, Calif., Tampa, Fla., and Phoenix.
View the full Yardi Matrix May report for additional detail and insight into 127 major U.S. real estate markets.
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