Yardi Matrix Report: Multifamily Rents Experience Decline in October

Multifamily asking rents experienced a modest decline for the second consecutive month in October, with the national average decreasing by $3 to $1,748, according to the latest Yardi Matrix National Multifamily Report. Year-over-year rent growth remained steady at 0.9%, maintaining the range of 0.7% to 0.9% seen throughout 2024. The national occupancy rate also dipped slightly to 94.7%, down 10 basis points from prior months.

Despite the slight downturn, demand for multifamily housing remains robust. Through September, over 329,000 units have been absorbed nationwide. However, regional performance continues to show significant variation, driven largely by differences in supply growth.

“The regional dividing line caused by supply growth continues,” the report notes. “In the Matrix top 30 markets, the top 11 metros for rent growth are in the Northeast, Mid-Atlantic, and Midwest, while the bottom nine are all in the Southeast or Southwest, where deliveries are high.”

Regional Insights on Rent Growth

Year-over-year rent growth was highest in East Coast gateway markets and Midwest secondary markets, led by New York City with a 5.3% increase. Detroit and Kansas City, Missouri, followed at 3.7%, Washington, D.C., at 3.2%, and Columbus, Ohio, at 3.1%.

Conversely, Sun Belt metros remained at the bottom of the rankings. Austin, Texas, recorded a -5.5% year-over-year decline, followed by Raleigh, North Carolina (-3.1%), Phoenix (-2.4%), Atlanta (-2.3%), and Orlando, Florida (-2.2%).

Month-to-Month Trends

Of the top 30 metros, 26 experienced month-over-month rent declines. The overall national decline in asking rents was driven by the lifestyle segment, which saw a 0.3% decrease in October. Rents for the renter-by-necessity segment held steady but saw significant declines in markets with high supply, such as Denver and Austin.

Single-Family Rental Market Trends

The single-family rental (SFR) sector also saw declines, with asking rents decreasing by $8 in October to $2,164. Year-over-year growth for SFRs dropped 30 basis points to 0.3%. Kansas City, Detroit, and Raleigh posted the highest year-over-year rent growth, while Miami, San Antonio, and Phoenix recorded the lowest.

“SFR demand has been strong, and we expect it to remain that way,” the report highlighted. Data from the U.S. Census Bureau showed that more than 2.5 million households moved into SFRs over the past year, citing reasons such as a desire for a new or improved home (15.3%), a new job or transfer (10.9%), cheaper housing (9.4%), and establishing a new household (8.7%).

Conclusion

While national trends show modest declines in asking rents, regional disparities underscore the significant role of supply and demand dynamics. Markets in the Northeast and Midwest continue to exhibit resilience, while oversupply challenges persist in the Southeast and Southwest. The single-family rental sector, despite recent declines, remains a popular option for households seeking flexibility and affordability.