Effective rents for new leases rose by 0.9% in the nation’s 100 largest metros between the second and third quarters of 2017, and the typical monthly rent is now $1,316, according to RealPage and Axiometrics’ Q3 report. On an annual basis, effective rents have grown by 2.6%, a rate consistent with other effective-rent annual rates recorded this year, which range from 2.5% to 3%.
Pricing increases have notably slowed this year following the large number of new completions in 2016. “Today’s rent-growth pace is roughly in line with the long-term norm,” says Greg Willett, RealPage’s chief economist. “Consumers should feel more comfortable with rental housing price jumps similar to typical wage growth, after several years when rents rose faster than incomes.”
On the local level, Sacramento, Calif., led the nation in rent growth among major metros, with effective rates for new leases up 6.9%. Las Vegas followed, at 5.8%. Some former top performers are absent from the top 10: Rent growth has slowed to 3.5% in Atlanta, 2.8% in Dallas, and 2.5% in Charlotte, N.C.
Apartment occupancy in the top 100 metros was 95.5% in the third quarter, down 20 basis points from the previous quarter and 50 basis points on an annual basis. Despite this drop, RealPage notes that this is still within the acceptable range of a “tight market.”
“Occupancy normally peaks in the third quarter and then falls off a bit due to seasonally slow leasing at the end of the year,” says Jay Denton, vice president of RealPage’s Axiometrics group. “We have some concern about how much occupancy could deteriorate during the next few months, given that big blocks of new supply are set for delivery during the seasonal leasing lull.”
Minneapolis–St. Paul has the highest occupancy rate in the top 100 metros, at 97.9%, followed by Providence, R.I., at 97.6%.