Rents Level Off in January

By Leah Draffen

Multifamily rents treaded water in January remaining unchanged from December at an average $1,701 U.S. asking rent. Year-over-year growth, which continues to decline, is now 5.5%, down 70 basis points from the previous month.

“All things considered, the performance is a positive indicator for the sector. Going into the year—since it would be impossible to maintain the growth of the last two years—the debate was about how much demand would decline and the impact on rents,” said Yardi Matrix.

In the middle of a seasonally slow winter, most of Yardi Matrix’s top 30 metros’ overall growth remained steady. For year-over-year growth, the top 30 metros were led by Indianapolis (10.5%), San Jose (8.1%), Miami (7.5%), and Kansas City (8.3%). Outside the top 30, Albuquerque (10.2%), Northern New Jersey (7.9%), St. Louis (7.2%), and Salt Lake City (7.0%) continue to perform well.

On the single-family rental (SFR) side, the market remained strong amid the volatile homebuying sector. The average U.S. asking rent increased $1 from December to $2,070. Asking rates for SFR units were up 4.2% year-over-year in January, falling 80 basis points in year-over-year growth from December.

“Concerns about a hard-landing recession that would reduce household formation are being alleviated by the continuing stellar performance of the job market. The economy created 517,000 new jobs in January on the heels of nearly 5 million new jobs in 2022, per the Bureau of Labor Statistics,” said Yardi Matrix.

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