A modest decline in multifamily rents nationwide has continued in May, adding another month to a negative trend that now stands at 23 straight, according to Markerr’s May rental report. Specifically, last month, multifamily rents fell 50 basis points year-over-year to $2,139.
“Typically, this period shows stronger seasonal rent growth, but it has failed to buck the negative trend despite the easy comps,” Markerr said.
Columbia, South Carolina, posted the strongest rent growth performance for the month, with prices climbing 4.1% year-over-year. Many of the top rent growth markets are in the South or tertiary markets, the report said. Other leaders included Lexington, Kentucky; Allentown, Pennsylvania; Syracuse, New York; and Omaha, Nebraska.
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Meanwhile, markets at the bottom of the chart include previously high-flying markets like Austin, Texas, several Florida markets and a few areas in Colorado. Pensacola had the worst performance, with rents falling 6.3%, followed by Austin, Cape Coral, Florida, Denver and Colorado Springs.
Looking forward, Markerr said it expects the strongest gains to occur in the Rust Belt and Northeast, led by Syracuse, where it anticipates rents to grow at a 5% compound annual rate. Additionally, the company’s top five projected growth markets include Youngstown, Pennsylvania; Albany, New York; Augusta, Georgia and Scranton, Pennsylvania. At the other end, Phoenix, Sarasota, Florida, Denver, Austin and Salt Lake City are expected to post the lowest compound annual rent growth over the next five years.
For single-family, rent growth was strongest in the Northeast and Rust Belt markets in May, led by Youngstown, Pennsylvania, Syracuse and Chicago. The worst markets for the category all occurred in Florida and Texas, with Cape Cora and Austin notably representing the bottom.
Tertiary markets like Huntsville, Alabama; Springfield, Missouri; and Wichita, Kansas, are some of the most affordable markets in the country, while the least affordable markets are Miami, New York and Los Angeles. Boston, San Diego and Chicago also pose affordability challenges. On the other hand, Ogden and Provo, Utah, are both considered cheaper markets due to median household incomes in those markets above $100,000, said Markerr.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
