Multifamily asking rents surged 10.3% annually in August, according to Yardi Matrix, marking the first time in the history of the company’s data set that year-over-year rent growth eclipsed double digits.
Nationally, overall asking rents increased by $25 to reach $1,539 in August and have risen by $140 year-to-date.
August’s figures are the latest proof of multifamily’s remarkable recovery from its earlier pandemic-induced doldrums, and while the country certainly isn’t out of the COVID-19 woods yet, its apartment market’s rebound has been robust.
The gains are being led by fast-growing tech hub markets, with Phoenix (22.0% annual rent growth), Tampa (20.2%) and Las Vegas (19.2%) leading the charge. All three are benefitting from strong job growth paired with a renter base with excess savings built up over the last year and a half, enabling them to upgrade to higher-end apartments. Additionally, with some employers signaling returns to onsite work on the horizon, renters have continued returning to urban cores.
The recovery in rents is no longer centered around such tech hub metros, however. All of the top 30 metros tracked by Yardi have entered positive rent growth territory for the first time since the pandemic began. That’s somewhat of an artificial watershed moment, considering that some of those positive year-over-year numbers, especially in still-lagging gateway cities, come courtesy of last August’s rent figures, when those gateways were in the midst of deep rental market issues. Still, all 30 of the country’s largest rental hubs showing positive annual rent growth during the COVID-19 era is a big threshold to cross.
Many of those large metros that saw the biggest struggles are seeing strong month-to-month rent growth numbers, suggesting that they continue to find their footing. Seattle, in particular stands out in Yardi’s data. Throughout the pandemic — and due in large part to the influx of remote-work policies within the tech sector — the Pacific Northwest city’s rental market saw a big slump. But lately, the city’s month-to-month rent numbers have shined, with its 3.1% increase from July trailing just Las Vegas and California’s Inland Empire among Yardi’s top 30.