Rental prices continue to make strong strides, growing month by month and year by year. According to Yardi’s month survey of 119 metros throughout the nation, the U.S. saw a rent increase of 6 percent in May 2016 since May 2014 to another all-time high of $1,204.
The rental market is holding on, increasing about $10 over April, or 0.9 percent. Housing market forecasters are still banking on the transition of millennials turning from renters into homeowners, but the rental market is reaping the benefits in the meantime.
The national average rents include 119 markets tracked by Matrix.
Seattle, Sacramento and Portland posted the biggest gains, all above 11 percent. The three cities were pretty close to one another in gains and about 4 percent higher than the fourth highest city, Pheonix. Houston saw the smallest increase in year-over-year rent growth.
Miami and Las Vegas were the closest cities to neutral in terms of growth, with Miami posting slightly lower figures.
In the 12-month trailing average from April, national rents in all asset classes increased 6.3 percent. Mature markets like Washington D.C. and Richmond have remained toward the bottom end of the totem poll with rental growth, but Houston fell six spots in May. Washington D.C. remained in the same slot.
Miami dropped below the neutral line, falling three spots and putting it below the national average. Miami nearly flip-flopped with Las Vegas, which bumped up three spots.
Occupancy rates are historically high
Yardi Matrix expanded its coverage into occupancy rates throughout the nation on average and on a market basis. In April 2016, the occupancy rate was 96 percent over April 2015’s 95 percent.
The report found that even markets on the low end of the spectrum are doing well by historical standards. In the coming year, occupancy rates are expected to decline.
Houston occupancy rates are at the lowest end of the market at 94.7 percent. April 2016 was just 0.01 percent lower than the previous month, but oil prices could have a lasting impact. Forcasted rent growth isn’t expected to be strong in the rest of the year, at just about 3.4 percent.
Year-over-year job growth is the lowest out of all 30 metros — and by a long shot. Job growth didn’t even surpass 1 percent, hitting only 0.6 percent as of March 2016 for the six-month moving average. Compare this to the city that has the biggest job growth, which just happens to be a couple hours away.
Austin job growth was 4.6 percent.
After experience strong growth through the end of 2014 and into 2015, rental growth in Houston began to steadily fall.
