Multifamily rents in April were 0.8% lower than the same month last year, according to Apartment List. Rents have cooled because a massive amount of new supply has entered the market, and more is still in the pipeline.
Apartment rents increased for the third consecutive month, but the growth, at 0.5%, is very weak. Rents typically begin to rise in the spring, and the gain this year is not only smaller than usual, but also lower than the month before. The national median rent in April was $1,396.
“This is typically the time of year when rent growth accelerates as moving season approaches, so the fact that growth has stagnated this month could be a sign that the market is heading into another slow summer,” according to the Apartment List report.
Apartment vacancies are also on the rise, reaching 6.7% in March, the highest figure since August 2020. New multifamily housing permits are slowing, but the number of units currently under construction is close to one record level, and last year saw the most new building permits. the apartments have been on the market for over 30 years.
Single-family rents are much stronger, up 3.4% in March year-over-year, according to a new report from CoreLogic. This annual increase, however, continues to decline as supply increases on the market from construction-to-rent companies.
About 18,000 single-family homes built for rent were started during the first quarter, an increase of 20% from the first quarter of 2023, according to an analysis of census data by the National Association of Home Builders. dwellings. Over the past four quarters, 80,000 such homes have started to be built, representing an increase of almost 16% compared to the previous four quarters.
“US single-family rent growth strengthened overall in March, although some weaknesses are revealed in the latest figures,” said CoreLogic senior economist Molly Boesel. “Overbuilt areas, like Austin, Texas, continued to slow down, declining 3.5% annually in March.”
Continued overall strength in single-family home rents indicates that potential buyers who are priced out of the home buying market are choosing to rent similar alternatives, according to Boesel. Mortgage rates have returned to around 7% and real estate prices continue to rise, making it more difficult to buy a home.
Among the nation’s 20 largest cities, Seattle saw the largest year-over-year increase in single-family home rents, at 6.3 percent, followed by New York at 5.3 percent and Boston at 5. .2%. Those leading the declines were Austin, Texas, down 3.5%; Miami, down 3.2%; and New Orleans, down 1.4%.
However, for the first time in 14 years, attached single-family properties, including townhouses, showed a year-over-year rent decline.
“The decline in the single-family home segment is driven by a subset of markets, primarily in Florida but including Austin and New Orleans. As multifamily apartments are completed, some markets are gaining rental supply, which competes with the single-family home segment. -family rental market,” added Boesel.
News Source : www.cnbc.com
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