U.S. apartment rents have increased for the third-straight month, according to Yardi Matrix’s monthly survey of 119 markets. June rent rates increased by exactly $10, or 0.9 percent, to another all-time high of $1,213.
Rents were up 2.7 percent in the second quarter of 2016 and climbed 5.6 percent on an annual basis. Year-to-date rents increased 4.2 percent, which is almost to the tipping point of the forecasted total 2016 growth.
Although home prices increased pretty consistently, rental growth has slowed. Annually, rent growth dipped 30 basis points and is down 110 basis points from the most recent high reported in October. Prices have steadily risen since the start of the year.
Yardi studied the Brexit in its June report as well, but the company doesn’t believe the overseas shift will have much of an impact on the apartment market in the U.S.
On an eight-year average, rent growth was reported by Yardi at 2.8 percent. The only market of the 119 studied that saw annual rents hit a mark below that rate was Houston, where rental growth has slowed substaintially. Compared with the national annual growth of 5.6 percent, Austin and Philadelphia were the two cities closest to the average.
Sacramento came in with the highest year-over-year growth, followed by Seattle, Portland and Los Angeles.
On a trailing 12-month basis in June, rents grew by 6.2 percent nationally. Rents fell by 10 basis points overall, which was largely due to a dip in lifestyle renters from 5.9 percent to 5.8 percent.
Chicago rent prices
Chicago is one of many metro areas that has seen an increase in lifestyle renters. Yardi reports a growth of 1.3 percent in the lifestyle segement, compared with the 1.1 percent overall growth rate.
Occupancy rate is considerably high in Chicago, at 96.5 percent as of May 2016. This figure remained stable month-over-month in the Windy City.
By the end of the year, rent growth in Chicago is forecasted by Yardi to be at 2 percent, putting Chicago rent growth pretty close to the bottom tier of growth throughout the nation’s cities. Chicago ranks right above the Twin Cities of Minnesota, Richmond, Philadelphia, Washington D.C. and Baltimore.
