Reports: Rent growth continues for multifamily markets

March 5, 2019 | Blog | Market Insights

Demand in the country’s 150 largest metros hits an eight-year high

How did the 2018 multifamily market perform? And what does 2019 have in store for investors? We dove deep into the latest multifamily reports from Yardi Matrix, RealPage, and Freddie Mac to find out.

Orlando’s on the up, according to Yardi

Nationwide, 2018 rent growth was higher than the general rate of inflation and occupancy, rising despite strong deliveries of new units. Yardi forecasts continued growth in major markets, including Orlando, in 2019.
Here are the key takeaways from the Yardi Matrix year-end multifamily report:

  • December year-over-year rent growth was at 3.2 percent, but rents remained at $1,419 from the previous month.


  • Social factors inhibiting home ownership—including student loan debt and downsizing Baby Boomers—will maintain the demand for rental housing.


  • Las Vegas was once again the top-performing metro, with a rent growth rate of 7.3 percent.


  • Yardi forecasts that the Southwest, West and South regions will continue to perform the strongest. It projects that Sacramento will jump to the top of the rent growth list—with an estimated increase of 6.5 percent—and that Orlando will also feature in the top five.

You can find the Yardi Matrix report here.

RealPage reports stronger rent growth and tightened occupancy

Orlando ranked high for rent growth, plus there’s good news for multifamily units priced in the middle to lower end of the rental spectrum.
Here are the key takeaways from RealPage’s year-end multifamily report:

  • Apartment owners and operators gained pricing power due to robust demand that drove occupancy to a fourth-quarter rate of 95.4 percent, up from 95 percent in late 2017. The country’s occupied apartment count climbed by 323,290 units in 2018, the strongest demand realized since 2010.


  • Large metro rent growth leaders were Las Vegas and Phoenix, each jumping 7.4 percent. 2018 rent growth reached 5 percent in Orlando, putting us third overall.


  • Building in the U.S. apartment sector remains aggressive. Within properties already under construction, there are 319,123 units slated to complete in 2019. Many of these will be within the luxury apartment niche.


  • Meanwhile, vacant units available to lease may be very difficult to find in properties in the middle to lower end of the pricing spectrum. Few renters will be moving around within the more moderately priced apartment stock, namely because there are so few housing options available for all but the most affluent renters.

You can find the RealPage report here.

The future looks bright, according to Freddie Mac

The agency foresees another strong year for the multifamily market with solid rent growth, predicting a nationwide average increase of 4 percent.
Here are the key takeaways from Freddie Mac’s 2019 Multifamily Outlook:

  • Performance in the multifamily market remained healthy during 2018. Growth is expected to continue into 2019, but at a more modest rate in comparison to recent years.


  • New supply will remain elevated through 2019 and into 2020 given the healthy construction market, based on permits and starts that are already in the system.


  • Rental demand will remain robust due to demographic and lifestyle preferences, along with the rising cost of home ownership. As a result, rents and vacancies will continue to outperform historical averages through 2019.


  • Property prices continue to grow due to solid multifamily fundamentals and strong investor demand for multifamily properties. As a result, multifamily origination volume is expected to come in at $305 billion in 2018 and grow to $317 billion in 2019—an increase of 3.9 percent.

You can find the Freddie Mac 2019 Multifamily Outlook here.
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