Rent Growth And Where Is The Market Going?
Time will tell how it will play out, but our outlook continues to be that the Fed will cut rates once towards the end of the year, and we will tip into a minor recession somewhere between Q4 of this year and Q2 of next year. As a result, our national rent forecast for this year remains unchanged at 1.7%. —Andrew Semmes, Senior Research Analyst, Yardi Matrix |
Geographically, we mostly continue to see the same patterns that we’ve identified and have been following for several months—the strongest growth is generally concentrated in midsize markets in the Midwest and Northeast, while markets that saw explosive growth during the pandemic are dealing with a large influx of supply that is now tempering rent growth while new units get absorbed. However, those broad categorical differences are beginning to fade, and there are pockets of both growth and stagnation across the country and in all different size markets. For example, California, Texas, Florida, Colorado, North Carolina and Georgia are all home to both some of the best and worst performing markets (California has Sacramento at -0.7% and both Eastern LA County and the San Francisco Peninsula at +0.8%, Texas has East Houston at -0.7% and McAllen at +0.7%, Florida has the SW Florida Coast at -0.3% and Pensacola at +1.0%, Colorado has Colorado Springs at -0.8% and Denver at +0.9%, North Carolina has Charlotte at -0.1% and Raleigh– Durham at +0.8%, and Georgia has Suburban Atlanta at -0.4% and Savannah at +1.0%). And notably, high-supply pandemic boomtowns like Austin, Nashville, Boise, Raleigh–Durham, Las Vegas and Reno all had over 0.5% month-over-month growth. Overall, we are experiencing normalization in rent growth across markets and a compression in the overall spread of rent growth. —Andrew Semmes, Senior Research Analyst, Yardi Matrix |