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Strong demand for multifamily rental units along with steady rent growth from the first quarter of 2020, projected through the first quarter of 2021, are bolstering the rental market. Here are four positive indicators:
- Year-over-year leases: In a recent NAR survey, REALTORS® reported a 33% year-over-year increase in dollar volume of new leases in the first quarter of 2020 in Class A and 35% in Class B/C, the best year-over-year leasing numbers across all commercial markets.
- Rent prices: Apartment rental prices are holding steady, rising an estimated 0.2% from June 2019 to June 2020. As of June 2020, the median price for a two-bedroom apartment was estimated at $1,192.
- Tenants keeping current: As of late June, 92.2% of apartment households in buildings with 5 or more units paid their rent—a level unchanged from a year ago.
- Construction: Multifamily starts have been on the rise since mid-2019, increasing from an annual rate of 333,000 in July 2019 to a peak of 619,000 in January 2020. There were 527,000 starts for multifamily units in February 2020.
Sources: NAR Research, National Multifamily Housing Council, ApartmentList.com