U.S. apartment rents have increased for the third-straight month, according to Yardi Matrix’s monthly survey of 119 markets. June rent rates increased by exactly $10, or 0.9 percent, to another all-time high of $1,213.
Rents were up 2.7 percent in the second quarter of 2016 and climbed 5.6 percent on an annual basis. Year-to-date rents increased 4.2 percent, which is almost to the tipping point of the forecasted total 2016 growth.
Although home prices increased pretty consistently, rental growth has slowed. Annually, rent growth dipped 30 basis points and is down 110 basis points from the most recent high reported in October. Prices have steadily risen since the start of the year.
Yardi studied the Brexit in its June report as well, but the company doesn’t believe the overseas shift will have much of an impact on the apartment market in the U.S.
On an eight-year average, rent growth was reported by Yardi at 2.8 percent. The only market of the 119 studied that saw annual rents hit a mark below that rate was Houston, where rental growth has slowed substaintially. Compared with the national annual growth of 5.6 percent, Austin and Philadelphia were the two cities closest to the average.
Sacramento came in with the highest year-over-year growth, followed by Seattle, Portland and Los Angeles.
On a trailing 12-month basis in June, rents grew by 6.2 percent nationally. Rents fell by 10 basis points overall, which was largely due to a dip in lifestyle renters from 5.9 percent to 5.8 percent.
Washington D.C. rent growth continues slowly
Rent growth overall is slow in Washington D.C., but lifestyle rent growth is considerably strong, helping to keep the market moving forward. Overall rent growth in June was 1 percent in D.C., and lifestyle renter growth was 1.4 percent.
D.C. and Baltimore ranked as the two last markets for strong rent growth out of those studied by Yardi. By year-end in 2016, D.C. rent is expected to grow 1.2 percent, and Baltimore’s forecasted at 1 percent.
Job growth in these markets is fairly slow, with D.C. posting a year-over-year increase of 2.3 percent and Baltimore a 1.7 percent increase as of April 2016.
The D.C. occupancy rate increased slightly in May over the previous month, from 96.2 percent to 96.4 percent, and Baltimore remained stable month-over-month at 96.2 percent.
