Its no surprise that Denver made the list, but its also important to know that all pricing fluctuations are hyper-local. While the year-over-year rent change was flat, September's month-over-month cut was somewhat notable at -0.46%. That was the largest September cut in about 15 years, and a bit deeper than last year's -0.31%. The big monthly cuts were (no surprise) concentrated in high-supplied markets exiting the leasing season: Jacksonville, Raleigh, Austin, Salt Lake City, Denver, Phoenix, Seattle and Fort Worth -- all topping -1% MoM, according to RealPage data. https://lnkd.in/gG254kcy
Rental Housing Economist (Apartments, SFR), Speaker and Author
The September data is out, and it's more of the same: U.S. apartment rent growth continues to hold around 0% (or 0.18% to be precise), where it's hovered since summer 2023 due to the historic deluge of new supply. Of course, there's a lot more nuance deeper into the data. Seven takeaways from September's apartment rent data: 1) We're a couple months away from erasing the ENTIRE rent>wage hump from 2021-22. That's huge! The improving affordability story widens the demand funnel, a win/win for renters and investors. 2) There remains a very clear correlation between supply and rents. Low-supplied markets are generally stabilizing around 2-4% rent growth, while high-supplied markets continue to see flat to slightly negative movement. The correlation (+ strong demand numbers) is a good reminder that flat rents are more about the 50-year supply peak than about affordability. 3) While the year-over-year rent change was flat, September's month-over-month cut was somewhat notable at -0.46%. That was the largest September cut in about 15 years, and a bit deeper than last year's -0.31%. The big monthly cuts were (no surprise) concentrated in high-supplied markets exiting the leasing season: Jacksonville, Raleigh, Austin, Salt Lake City, Denver, Phoenix, Seattle and Fort Worth -- all topping -1% MoM, according to RealPage data. That shows operators getting more aggressive on rents to compete for leases in a slower leasing season. 4) Nearly two-thirds of the nation's top 150 markets saw year-over-year rent change deteriorate (almost all very slightly) between August and September. Key examples include some fast-growing Southeast tertiary markets and a scattering of West Region markets: -- Fort Myers, FL, from -7.6% to -10.5% -- Sarasota, FL, from -2.8% to -5.4% -- Huntsville, AL, (the national supply leader) from -3.5% to -5.2% -- Seattle, WA, from +1.5% to +0.6% (Seattle is one to watch with supply levels peaking later than most markets.) -- Denver, CO, from -0.4% to -1.2% 5) In the Bay Area, San Jose is charting a different course from San Francisco and Oakland, with rent growth rebounding to a 16-month high at 2.5%. Next door, San Francisco had been appearing to regain steam but took a surprise step backward in September, from 2.4% to 1.6%. East Bay rents fell 2%, an 11-month low. 6) Nationally, 20 of the 21 top markets for rent growth are located in the Midwest or Northeast regions -- continuing a pattern of low-supply markets outperforming. The only exception was Honolulu. 7) Ultra-high-supplied Austin remains the weakest performer among large markets (rents at -8.1%), but if there's a silver lining for operators/investors, it's no longer getting worse. It's actually improved a slight 20 bps in the last couple months, the first sign of any momentum in nearly three years. More to come later this week on September and Q3 data. #apartments #multifamily #housing