Demand is strong and rents are up year-over-year
Investors in multifamily rental housing are still benefitting from rising rents amid strong demand according to a new report.
Yardi Matrix says that average rent growth in November was up 3.1% year-over-year – 20 basis points below October’s level - and has remained above 3% since spring 2018.
However, the winter weather has cut $3 off average rent to $1,473 and the seasonal slowdown in growth is expected to remain into 2020.
For year-over-year rent growth, Phoenix and Las Vegas held the top spots in November with Sacramento, Calif., California's Inland Empire and Raleigh, N.C., rounding out the top five metros.
San Jose (0.1%), San Francisco (1.4%), and Houston (1.4%) have the slowest rent growth. For the Californian markets, along with Seattle, the seasonal slowdown has become a regular feature in recent years, possibly due to new supply but there is no obvious reason for the trend.
Absorption of multifamily rental units has held above 250K for six consecutive years and for 2019 has topped 320,000. The cycle peak was 377,000 in 2016.
The strongest markets for units absorbed were Seattle, Denver and Dallas with Washington, D.C., and Texas metros Houston and Austin also making strong showings.
