Multifamily rents posted positive yet weak growth in July, with the average advertised rent increasing by $2 to $1,754, according to Yardi Matrix’s National Multifamily Report. Year-over-year growth was unchanged at 0.7%.
Demand remains strong for multifamily housing; however, elevated levels of lease-up inventory continue to hold back rent growth. Over 300,000 units had been absorbed as of June. However, approximately 1 million units were under construction in July, about half of which were in pre-leasing, estimated Yardi Matrix.
Yardi Matrix called the multifamily outlook for the second half of the year “sanguine.”
“For one thing, deliveries will decelerate in coming quarters due to the declining number of starts, relieving some of the supply pressure. The economic outlook has improved in recent months as job growth has exceeded expectations and there are fewer worries about the impact of trade policy,” the report noted. “Interest rates remain a major roadblock for multifamily. The Federal Reserve is cautious about lowering rates before the inflationary period of tariffs is clear. The pricing uncertainty will continue to keep a damper on transaction activity.”
In July, Midwest and coastal markets saw the highest year-over-year rent growth. Chicago led the way with 4.1% annual growth, followed by Columbus, Ohio, 3.9%; Detroit, 3.5%; New Jersey, 2.7%; and San Francisco, 2.6%. Sun Belt markets continued to see negative rent growth, with Austin, Texas, at -4.6%; Denver, -3.9%; and Phoenix, -2.8%.
Both lifestyle and renter-by-necessity rents were up month over month in July. Similar to year over year, Midwest and coastal markets topped the month for rent gains. Detroit led with a 1% increase. New York, 0.9%; Columbus, 0.8%; and Portland, Oregon, and Baltimore, both at 0.6%, rounded out the top five.
Several markets that had been consistent rent growth standouts cooled last month, including Kansas City and Indianapolis posting month-over-month declines of -0.7% and -0.4%, respectively. However, some markets that had been underperforming got a boost in July. San Francisco posted a 0.4% increase, and Atlanta and Austin also turned positive month over month.
On the single-family rental side, advertised rents increased $3 in July to $2,205, with year-over-year growth up 0.4%.
Chicago, Kansas City, and California’s Inland Empire experienced the highest year-over-year growth in July, while Raleigh, Austin, and Tampa, Florida, came in at the bottom of the list.
