RealPage Reports Slower Rent Growth

CARROLLTON, TX- The effective rent growth for new U.S. apartment leases in the first quarter was 2.6%, according to MPF Research, the market intelligence division of RealPage, Inc., a Texas-based software provider. At the end of 2011, MPF notes, annual rent growth hit 4.8%. Slower growth among top-end apartment communities, which MPF defines as those built since 2000, largely drove the overall slowdown, with their rents growing only 1.9% over the last year. The rents in older apartment segments grew between 2.4% and 2.9% over the same period. That’s a big change from just over a year ago, when rents were increasing between 4% and 5% in all of these categories.        

Developers in many markets will soon deliver a large number of new apartments, and MPF researchers believe this helps explain the more moderate growth. “Many owners and operators at the best properties want to be sure that their apartments are completely full when deliveries of new units ramp up during the coming months,” says Greg Willett, a vice president of MPF. “In turn, smaller price increases at the top-of-the-market projects are leaving a little less room for big rent bumps in the older stock.”