Yardi Matrix Increases Its Rent Forecast for 2024

Yardi Matrix has increased its national rent forecast for 2024 from 0.8% to 1.8% following strong job gains and improving consumer confidence. The company still expects a mild recession to occur but its timing has been pushed back to the end of this year or the beginning of 2025.

That said, landlords are unlikely to gain any pricing power from the change as the substantial influx of supply expected to come online this year will dampen rent growth in many of the larger Sun Belt markets.

In addition, it added, “overall performance in asking rents in January was remarkably strong for a month that is generally very weak and often negative.”

Renters by necessity – those who would prefer to own a home but lack the funds for a downpayment or mortgage – saw their rents go up in January by 0.08% around the country, and in some markets by more than 1%, especially in the South and Northeast. In contrast, Lifestyle rents – those in the high to mid-range income group –rose 0.04% nationwide.

The January report marked a welcome break from a five-month pattern of successive average rent declines. “Multifamily asking rents saw marginally positive growth of 0.07% in January,” Yardi noted. In 71 markets rents rose by an average 0.49% and a median 0.38%. However, in 61 markets rents slipped an average 0.37% and a median 0.31%. In 10 markets, rents stayed the same.

Rents increased the most in midsize cities in the Northeast and South, the locations of five of the seven markets where asking rents rose by more than 1%: White Plains, Buffalo, Birmingham, Worcester-Springfield and Columbus, GA. These markets, along with Macon, Memphis, and Louisville, also have a high renter-by-necessity presence. Four Western markets saw similar rent increases: Honolulu, Las Vegas, Spokane and California’s Central Coast. The worst dips in rents occurred in Western markets and Florida with San Diego, Orange County, North Central Florida and Jacksonville among the hardest hit.

Lifestyle renters in midsize cities in the South and Midwest benefited from smaller rent increases than those imposed on renters by necessity. However, lifestyle renters in 14 markets experienced spikes of more than one percent, including tenants in El Paso, Birmingham, Corpus Christi, Cleveland-Akron, Columbus, GA, Columbus, OH, Madison, Dayton, Pittsburgh and Lubbock along with Honolulu, the Inland Empire, Miami, and the Central Coast.

Yardi noted that renters by necessity in the Midwest saw rents grow at roughly three times the rate of lifestyle rents and about twice that rate in the Northeast. It predicted the trend would continue throughout the year.

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