Average US multifamily rent prices reported an eighth consecutive month of record high prices in August, increasing to $1,222 from $1,119, according to the Yardi Matrix monthly report.
The national average rental price has increased 5 percent year-over year, according to the report published by market intelligence company Yardi Systems.
But while rent growth remains solid in most of the country, signs of deceleration are starting to show in some tech-centric metros like San Francisco, possibly due to a combination of slowing job growth and increased supply.
Strong rental price growth was seen in 18 of Yardi’s top 30 US metros, where 60 percent of metros reported gains between 4 and 7 percent. The strongest growth was reported in two west coast — Sacramento, with a nearly 12 percent increase, and Seattle, with just over 9 percent increase.
Washington, DC was one of a few top 30 metros that were on the east coast and reported “reasonably strong growth” in rent, just under 4 percent, and Yardi anticipates a year-end rent growth forecast of 1.2 percent in DC. Nearly 3 percent of total inventory in DC through August consisted of new completions.
The occupancy rate in DC remained stable at just over 96 percent from June to July, even though occupancy rates have slightly decreased nationally. DC logged 2.3 percent year-over year job growth, lower than other top east coast metros like Orlando and Tampa, which recorded 4 and 3.3 percent job growth.
The deceleration of rent growth in some metros may be an effect of low income growth, which Yardi estimates is between 2 and 3 percent on a national level, coupled with low job growth rates which forces rent growth to return to a more “moderate level.”
The fastest deceleration in rent is limited to metros that are seeing a combination of slowing job growth and increased supply. Prices are returning to “normal levels” due to waning demand and increased inventory. Tech-centric San Francisco reported 12 percent growth in rent in 2015, but has slowed to 1.6 percent year-over-year through August, according to Yardi’s data.
You can read the full August Yardi Matrix here.