National Multifamily Report – September 2024
Advertised asking rents posted a $3 decline to $1,750 in September, reflecting solid demand, according to the latest Yardi Matrix survey of 140 markets. Year-over-year, national rent growth stood at 0.9 percent, and occupancy in stabilized assets was at 94.8 percent. Similarly, SFR rates fell $3 to $2,167 in September, for a 0.6 percent year-over-year increase. Occupancy dropped 30 basis points year-over-year but remained healthy at 95.3 percent in August.
Improving economic conditions rekindle optimism in the multifamily industry, with supply growth remaining a crucial factor in rent performance. In September, among Yardi Matrix’s top 30 metros, rent growth was positive in eight of the 10 metros with the least supply growth, and negative in eight of the top 10 metros with the most supply growth. Gateway metros in the East and secondary markets in the Midwest remained in the lead for rent growth, headed by New York City (5.4 percent year-over-year), Kansas City (4.2 percent) and Boston (3.4 percent). Bottom-ranking metros were Austin (-4.9 percent), Raleigh (-3.1 percent), Phoenix (-2.4 percent), Tampa (-2.3 percent) and Charlotte (-2.1 percent).
The decline in overall advertised asking rents was caused entirely by a 0.3 percent decline month-over-month in the Lifestyle segment (-$6 to $2,065). Meanwhile, Renter-by-Necessity rents remained flat, bolstered by demand in high-cost, low-supply markets, led by New York (0.9 percent), Philadelphia (0.6 percent) and Indianapolis (0.5 percent).
Absorption, occupancy illustrate strong demand
The national occupancy rate remained at 94.8 percent in September for the fourth consecutive month, maintaining a flat performance year-over-year. Most markets fell in the -0.2 percent to 0.2 percent range, with several exceptions outshined by Las Vegas (1.2 percent to 93.8 percent) and followed by Detroit and Portland (both 0.5 percent).
The pandemic had boosted demand, producing strong performance across multifamily fundamentals. Robust economic and employment growth, immigration and demographics sustained demand, and between March 2020 and August 2024, 1.7 million multifamily units (10.8 percent of current stock) were absorbed nationally. More than 300,000 units were absorbed throughout the first three quarters of 2024. Total absorption since the onset of the pandemic is led by Dallas (108,000 units), Houston (71,000 units) and Washington, D.C. (60,000 units).
SFR advertised asking rents softened slightly in September, down $3 to $2,167, for a 0.6 percent year-over-year increase. Occupancy in the sector remained flat year-over-year at 95.3 percent. Leaders in year-over-year rent growth were Kansas City (4.7 percent), Indianapolis (4.3 percent), Columbus (3.8 percent), Chicago (3.4 percent) and Detroit (2.6 percent). SFR rents declined in markets with low occupancy rates, including Phoenix (-3.8 percent, 92.6 percent occupancy), Jacksonville (-2.9 percent, 90.9 percent) and Austin (-2.7 percent, 90.8 percent).