Rents are rising for multifamily but there is some risk for the market

The fundamentals of the US multifamily sector remain favorable but there are some downside risks from the wider economy.

The latest assessment from Yardi Matrix show that US multifamily rents were up 3.4% year-over-year in July with notable gains for fast-growing Southwest and South metros Las Vegas, Phoenix, Charlotte and Raleigh, N.C., Atlanta and Nashville, Tenn

Tech-rich metros such as Boston, Seattle, and Portland, Ore. also posted strong rent growth.

However, the report says the multifamily market has the “potential for market volatility and slower growth,” due to questions about the overall economy.

The average US multifamily rent rose $3 in July to reach $1,469. The metros that posted the largest year-over-year gains for the month were Sacramento, Calif., and Austin, Texas, joining Las Vegas, Phoenix and Charlotte as the growth leaders. Annual rent growth has topped 3% on a year-over-year basis for each of the past 13 months.

Yardi says that the multifamily and office sectors are currently the top performing commercial property types across all major metros but again the risks, especially from a global economic slowdown, remain.