The rent is too high. Anyone living in a major US would most likely agree. Seems the pandemic and its related fallout have spurred action on that front, both in rental costs and where those rents are being paid.
US mutifamily rents decreased by $2 in June, down to $1,457, and year-over-year growth was in the negative for the first time since December of 2010.
A report by Yardi Matrix showed a .8% decline in the first half of 2020 and a .4% decline in the second quarter alone, a marked change from the 2.6% growth during the first half of 2019 and a 1.2% increase in the second quarter of the same year.
Rent growth in the top 30 markets in the US saw 19 of them go negative, with four of the top five markets in populous California showing declines, including San Jose (-1.1%) and San Francisco (-.9%).
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Other gateway cities, such as Boston, L.A., Chicago, Washington, D.C. and Houston also saw negative rent growth.
The year started off strong, with 3% YoY rent growth in January and 2.9% in February. And then the world changed.
Since January, rents have declined nationally by $12. The report shows an “exodus” from major U.S. cities, fueled by the success of remote working and the desire of many to get out of areas where it is harder to socially distance and into less expensive, less populous secondary and tertiary cities such as Minneapolis/St. Paul and Indianapolis, both of which saw growth in rent percentage. Kansas City increased by 1%.
Other smaller markets have shown strong YoY rent growth as well, with St. Louis (4.5%), Colorado Springs (4.0%) and Tucson (3.9%) leading the way.
Rent collection is still on par with 2019, with July of 2020 showing only a 2% decline in rent collected. But July is, as of now, the last month that allows many Americans to collect an extra $600 in stimulus money from their unemployment claims (of which there were another 1.4 million announced on July 23). Absent that cash, many Americans will be in a crunch to pay, with August being a bellwether to what may be a long remainder of the year for many.