Multifamily Market Continues to Show Strength
■ Multifamily rents increased by 1.6% on a year-over-year basis in April, the largest increase that we have seen since the beginning of the pandemic.
■ Overall rents increased by $10 in April to $1,417. The last time overall rents increased by that amount in a month was June 2015. Out of our top 30 markets, 24 had month-over-month rent growth greater than 0.5%. Gateway markets continued their path to recovery this month, with
all gateway markets showing positive MoM gains in April.
■ Only six markets out of our top 30 had negative year-over-year rent growth this month. One of the six, Austin (-0.1%), is poised to turn positive next month, given the strong MoM gains. The other five markets had solid MoM gains, as well, but are a little further behind in their rebound.
Nationally, the multifamily market continues to show strength, with rents increasing the most on a year-over-year basis since March 2020 and on a dollar amount basis since June 2015.
Markets that have been hot for years continued to show strength in April, with the Inland Empire (9.4%) almost to double-digit rent growth on a year-over-year basis. The difference this month is that now we are seeing metros that have struggled during the last year post solid month-over-month gains.
All gateway markets are beginning to recover, with some further along in the recovery process than others. Miami leads the gateway markets with 0.8% rent growth on a trailing 3-month basis. All other gateways had positive trailing 3-month rent growth, as well, with Chicago (0.5%) and Boston (0.4%) showing strong gains. Washington, D.C. (0.2%), New York, San Francisco and Seattle (all 0.1%) are a few months behind in the recovery process, but we expect the gains in these markets to strengthen as we head into the summer.
The Inland Empire, Sacramento (8.4%) and Phoenix (8.1%) have been leading all markets for rent growth for the past few years, and the pandemic has only accelerated that trend. Over a five-year period, rents in the Inland Empire have increased by 31%. Rents in Sacramento and Phoenix have increased by 34%.
To put that in perspective, national rents have increased by 12% over a five-year period. Five years ago, overall rents were extremely low in each of the three aforementioned markets, with plenty of room to run. But with such strong growth over the past five years, when will rents
begin to taper off in these markets?
Read the full Matrix Multifamily National Report-April 2021