Ongoing inflation and Russia’s invasion of Ukraine are beginning to impact both economic growth and rent performance, according to the latest Multifamily National Report from Yardi Matrix.
Average U.S. asking rents rose $14 in March to an all-time high of $1,642, the report stated. However, year-over-year growth dropped 50 basis points to 14.8%—an indication that rents are beginning to slow after 2021’s record-shattering performance.
Rent prices broke record highs in January, but there may be good news on the horizon for renters whose budgets have been stretched thin. According to the report, even though rents for single-family rentals continue to rise month-over-month, growth is starting to ease up in that subsector. March is typically the beginning of spring seasonal growth, and that increase was slightly lower than 2021, when rents went up $18 (1.3%), though it’s still higher than a typical year.
Additional key findings:
- The average U.S. single-family rent rose $14 to $1,999 in March, while year-over-year growth dropped 90 basis points to 14.1%.
- Rent growth continues to be led by population shifts to the Southeast and Southwest. Miami, Orlando and Tampa, Florida, Las Vegas, Nevada and Phoenix, Arizona all recorded asking rent increases of 23% or more in March.
“Rent growth is unlikely to keep pace with 2021, as last year’s explosive movement started in the second quarter,” state Matrix analysts.
“The big picture that emerges from March multifamily data is that the market remains healthy, though signs point to the inevitable deceleration in some markets,” states the report. “Meanwhile, economic conditions and global events contain headwinds that justify the expectations of moderation and caution.”
“Signs point to demand in the Sun Belt and West cooling off slightly,” according to the report. “Occupancy rates in several markets have decreased over the last year as demand hasn’t kept pace with deliveries. Phoenix, Arizona showed the largest decrease in occupancy (-0.5%) in March, followed by the Inland Empire (California) and Las Vegas, Nevada (-0.4%) and Sacramento, California (-0.3%).”
To read the full report, click here.