Economic headwinds lead to the first September rent decrease since the 2009 financial crisis
The multifamily housing market is feeling the pinch of a decelerating economy, coupled with an influx of new properties in certain areas, leading to a slight dip in asking rents.
In September, the average asking rent across the US retreated by $6, settling at $1,722, according to the recent Yardi Matrix National Multifamily Report. This decline is mirrored in the year-over-year growth, which slipped 60 basis points from the previous month.
This downturn in September marks a first since the 2009 global financial crisis. The year-over-year growth plummeted to a mere 0.8% – a low not seen since the initial recovery phase post-pandemic in early 2021.
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The report attributed this decline to a combination of factors, including the depletion of the post-pandemic surge in household savings and the resumption of student loan payments for millions of households, leading to reduced spending capacity.
“Consumers are losing some strength as the post-pandemic boom in household savings dwindles, while millions of households will have less to spend as they resume paying student loans,” the Yardi report read. “Energy prices are rising, and even large-scale strikes could have some impact if they continue at length. Meanwhile, higher interest rates are working their way through the economy.”
A similar trend was observed with single-family rents, which declined for the second consecutive month to $2,104, down $4 nationally. Despite this, the year-over-year growth experienced a minor 10 basis point decline to 0.4%. Occupancy rates held steady at 95.9%, indicating the demand for rental properties remains strong.
A closer look at market performance reveals a divided landscape. Metros in the Northeast and Midwest are leading the Top 30 rankings: New York City (5.6% year-over-year), New Jersey (5.2%), and Chicago (4%), while most of the 14 metros reporting negative year-over-year growth are situated in the Sunbelt or West.
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