Strong Job Market Boosts Prospects for Multifamily Rent Growth

Article originally posted on HERE on March 5, 2024

A strong jobs market has boosted Yardi Matrix’s forecast of apartment rent growth in 2024. The analytics firm reported Thursday that multifamily asking rents broke the five-month streak of sequential average declines in January, rising 0.07%.

Of the 142 markets tracked, 61 posted declines in January, 71 saw increases and 10 remained flat. The biggest increases continued to occur in midsize cities in the Northeast and South, including White Plains, NY; Buffalo, NY; Birmingham, AL (pictured); Worcester-Springfield, MA; and Columbus, GA. The largest decreases were consistent in Western markets and Florida.

On a national level, by asset class, rents in the Renter-by-Necessity (RBN) segment rose 0.08%, outperforming Lifestyle (0.04%). “Overall performance in asking rents in January was remarkably strong for a month that is generally very weak and often negative, and we expect the trend of RBN rents performing better than Lifestyle rents to continue throughout the year,” according to Yardi Matrix analysts.

The strong job reports and improving consumer confidence have pushed the expected mild recession to the end of 2024 or beginning of 2025. This has also boosted Yardi Matrix’s national forecast for 2024 rent growth, up from 0.8% to 1.8%. However, the analytics firm’s report says the substantial influx of supply expected to come online this year will dampen rent growth in many of the larger Sun Belt markets.