The Midwest is outpacing other regions when it comes to rent growth, according to the latest figures from online marketplace Apartment List.
After a few months of record-setting price declines, national rental demand is rebounding in line with the usual seasonal trend. Apartment List's national rent index increased by 0.3 percent over the course of February, marking a return to positive rent growth after five straight month-over-month declines. But year-over-year rent growth is continuing to decelerate, and now stands at 3.0 percent, its lowest level since April 2021.
Midwestern markets are leading the way nationally, surpassing even the previously red-hot Sun Belt locations. Oklahoma City has seen the nation's fastest metro-level rent growth over the past 12 months, with prices up by 6.8 percent year-over-year, followed by Hartford, CT. Beyond that, the top ten includes six Midwestern metros – Indianapolis, Chicago, Columbus, Cincinnati, Kansas City, and Milwaukee.
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"With many previously affordable Sun Belt markets having seen rents spike by 30 percent or more over the past two and a half years, markets in the Midwest may now represent some of the last bastions of affordability, and could therefore be drawing new attention," the March 2023 Apartment List National Rent Report states.
Apartment List first noted this trend in December when it reported signs of demand heating up in Midwestern markets such as St. Louis, Indianapolis, Kansas City, and Cincinnati metros.
The Midwest also figured prominently in a list of emerging residential real estate markets, according to a study by the Wall Street Journal and Realtor.com. Lafayette, Ind. topped the list followed by Ft. Wayne, Ind.; Elkhart – Goshen, Ind.; Topeka; Johnson City, Tenn.; Columbia, Mo.; Kingsport – Bristol, Tenn.-Va.; Savannah; Columbus; and LaCrosse-Onalaska, Wisc./Mn.
Dominic Martinez, a Northmarq senior vice president, told GlobeSt.com in an earlier interview that Midwest rent growth is partially being fueled by a more conservative approach to adding supply.
"While there have been significant increases in the multifamily supply in more primary markets such as Phoenix, Dallas, etc., secondary markets, such as St. Louis, Omaha, etc., have been far more restrained in their development pipelines," according to Martinez.
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