CARROLLTON, TX—Even as apartment rents continue to climb, so do owners' retention rates. MPF Research said 51.1% of renters whose leases were set to expire last month chose to renew rather than move out, a 300-basis point increase from August 2014. Those renewals included an average 5.4% increase in monthly rent, according to Carrollton, TX-based MPF, based on an analysis of data from parent company RealPage Inc.

The August rent increase was the largest for renewals in nearly 10 years, MPF says. More than 50% of apartment tenants have chosen to renew over the past 20 months. Prior to 2010, the renewal rate tended to fall within the mid-40% range.

“Renters are increasingly choosing to stay put and renew their leases in spite of rapidly rising rents and historically large levels of new supply, which logic would suggest would be driving down retention,” says Jay Parsons, director of analytics for MPF. “And the fact that retention is still so strong speaks to the depth of demand for apartments and to the absence of any sort of affordability crisis in conventional, investment-grade apartments.” It's a different story, he notes, for low-income households.

While each US region saw retention rates of better than 50% last month, some fared better than others. The Northeast and Midwest tended to see higher retention rates than the South and West. Accordingly, the Northeast and Midwest also are home to most of the nation's major metropolitan areas with the highest apartment retention rates.

Conversely, cities in the South and West, where retention rates were lower, “are generally younger markets with stronger job growth of late,” Parsons says. “And younger population plus more job growth tends to equal more mobility, which in turn means higher turnover or lower retention.”