Is It Time to Worry About Multifamily’s Slowing Rent Growth?
November 11, 2021 | Erik Sherman | GlobeSt. com
The pace of apartment rent growth is slowing, according to a report from RealPage. While it seems to be a seasonal issue, the news comes at a bad time for multifamily investors and property owners as rising inflation creates a greater need for investment hedging.
First the good news: Year over year, rents were up 13.1%. That compares to average annual rent growth between 3% and 4% during the last decade, the report noted. In 2015, prices jumped a bit more than 5%.
But, RealPage also reported that asking move-in rents were up in October 6% over September, the slowest pace since February.
The company called this “the normal seasonal pattern,” but other forces are in effect as well, such as progress in dealing with Covid-19 and uneven progress in pandemic rental assistance reaching tenants and then landlords. Also, in some major markets where vacancy rates went up as people bailed out, rental rates dropped, meaning a lower baseline that could make a return to normalcy look like growth when it was regaining lost ground.
