Yardi Matrix: Multifamily Rent Growth Slows, but Demand Remains Strong Article originally posted on Multifamily Executive on October 10, 2024 Multifamily asking rents dipped slightly in September due to seasonality and a supply influx in the Sun Belt. The average U.S. asking rent decreased $3 to $1,750 last month, while year-over-year growth was unchanged at 0.9% for the third consecutive month, according to the latest Yardi Matrix National Multifamily Report. The national occupancy was 94.8% for the fourth consecutive month in September and unchanged year over year. According to Yardi Matrix, the strong economy has been a major driver of rental demand. Over 300,000 units have been absorbed through the first three quarter of the year. Absorption also has been strong in the Sun Belt and Mountain West, driven by strong migration and job growth. Rents have turned negative or flattened in some of these metros because of the newly delivered units. Yardi Matrix projects advertised rent growth to likely remain weak in the coming months in these regions due to slower winter months and the supply wave continuing into 2025. “Supply growth remains the bright line determining advertised rent growth,” the report noted. “Among the Matrix top 30 metros, advertised rent growth was positive in eight of the 10 metros with the least supply growth and negative in eight of the top 10 with the most supply growth.” Year-over-year rent growth continued to be highest in East Coast gateway metros and Midwest secondary markets. New York City continued to lead the way at 5.4% growth year over year, followed by Kansas City, Missouri, at 4.2%; Boston at 3.4%; Indianapolis at 3.3%; and Washington, D.C., at 3.1%. The Sun Belt metros with the increased supply continued to be at the bottom of the rankings for year-over-year rent growth. Austin, Texas, saw -4.9% year-over-year rent growth for September, followed by Raleigh, North Carolina, at -3.1%; Phoenix at -2.4%; Tampa, Florida, at -2.3%; and Charlotte, North Carolina, at -2.1%. Month over month, 18 of the top 30 metros posted rent drops. The national asking rent decrease was due to the lifestyle segment, which saw advertised rents dropping 0.3%—or $6 to $2,065—in September. Renters for the renter-by-necessity segment were unchanged overall and recorded strong growth in high-cost, low-supply markets. For the lifestyle segment, Denver, Boston, San Diego, and Seattle fared the worst, while gains were found in Detroit, Indianapolis, Baltimore, and San Francisco. New York led the growth in the renter-by-necessity segment, followed by Philadelphia, Indianapolis, New Jersey, San Diego, and San Francisco. On the single-family rental (SFR) side, asking rents decreased $3 in September to $2,167, with year-over-year growth dropping 30 basis points to 0.6%. Raleigh, Kansas City, and Indianapolis topped the list for the highest year-over-year rent growth, while rents are softening in markets with low occupancy rates, such as Phoenix; Jacksonville, Florida; and Austin. “Many of the same factors that impact multifamily performance are also in play in the SFR market,” noted the report. “SFR advertised rent growth is strong in Midwest metros where fundamentals are boosted by manufacturing sector growth and limited supply.”