flexiblefullpage -
billboard - default
interstitial1 - interstitial
catfish1 - bottom
Currently Reading

Average U.S. apartment rent reached all-time high in May, at $1,716

Apartments

Average U.S. apartment rent reached all-time high in May, at $1,716

Rent growth remains positive despite economic uncertainty, according to Yardi Matrix.


By Yardi Matrix | June 27, 2023
Average U.S. apartment rent reached all-time high in May 2023, at $1,716 - Image by edvaldocostacordeiro from Pixabay
Image by edvaldocostacordeiro from Pixabay

Multifamily rents continued to increase through the first half of 2023, despite challenges for the sector and continuing economic uncertainty. But job growth has remained robust and new households keep forming, creating apartment demand and ongoing rent growth.

“We anticipate that rents will continue to increase modestly over the course of the year as demand has firmed, albeit at a more moderate rate in line with historic growth levels,” say Yardi Matrix experts in a newly released U.S. Multifamily Outlook.

Through the first five months of 2023, U.S. asking rents rose $17, or 0.9%, with year-over-year growth falling to 2.6%.

“We expect continued deceleration, with rent growth of 2.5% for the full year,” states the outlook. The average U.S. apartment rent reached an all-time high of $1,716 in May.

Challenges for the sector include slowing demand, growing issues with affordability, slower population growth and competition from a large number of new units coming online through 2024.

Matrix Multifamily National Outlook-Summer 2023

The capital side of the industry has suffered due to heightened interest rates, which show little sign of decreasing in the near-term. Property values are down 15-20% from their peak and are still declining due to the higher cost of capital.

New deliveries will be high at least through the end of 2024, as the 1 million units under construction come online. New starts are now declining, however, because debt is more expensive and fewer banks are financing construction.

Household formation, which drove the 22% cumulative growth in U.S. asking rents over 2021 and 2022, has slowed but remains positive. Although some pandemic demographic trends are moderating, the desire for more space to balance living, working and family appears to have staying power and should continue to drive demand.

Demand is also boosted by the sharp drop in home sales, which keeps renters in apartments. High mortgage rates also create an affordability hurdle for first-time buyers and middle-income families looking to trade up.

Home mortgage rates rose to 6.5% in March 2023, up 230 basis points from March 2022, increasing monthly mortgage costs by 29% and overall ownership costs by 20%, according to the Harvard Joint Center of Housing Studies.

Matrix Multifamily National Outlook-Summer 2023 2

Matrix Multifamily National Outlook-Summer 2023 3

Related Stories

Mixed-Use | Apr 9, 2024

A surging master-planned community in Utah gets its own entertainment district

Since its construction began two decades ago, Daybreak, the 4,100-acre master-planned community in South Jordan, Utah, has been a catalyst and model for regional growth. The latest addition is a 200-acre mixed-use entertainment district that will serve as a walkable and bikeable neighborhood within the community, anchored by a minor-league baseball park and a cinema/entertainment complex.

Multifamily Housing | Apr 9, 2024

March reports record gains in multifamily rent growth in 20 months

Asking rents for multifamily units increased $8 during the month to $1,721; year-over-year growth grew 30 basis points to 0.9 percent—a normal seasonal growth pattern according to Yardi Matrix.

MFPRO+ New Projects | Apr 8, 2024

Construction complete on The Station Apartments in Minneapolis

Big-D Midwest recently completed construction on The Station Apartments at Malcolm Yards, an innovative and unique housing property in Minneapolis.

Mixed-Use | Apr 4, 2024

Sustainable mixed-use districts: Crafting urban communities

As a part of the revitalization of a Seattle neighborhood, Graphite Design Group designed a sustainable mixed-use community that exemplifies resource conversation, transportation synergies, and long-term flexibility.

Architects | Apr 2, 2024

AE Works announces strategic acquisition of WTW Architects

AE Works, an award-winning building design and consulting firm is excited to announce that WTW Architects, a national leader in higher education design, has joined the firm.

Standards | Apr 1, 2024

New technical bulletin covers window opening control devices

A new technical bulletin clarifies the definition of a window opening control device (WOCD) to promote greater understanding of the role of WOCDs and provide an understanding of a WOCD’s function.

Adaptive Reuse | Mar 30, 2024

Hotel vs. office: Different challenges in commercial to residential conversions

In the midst of a national housing shortage, developers are examining the viability of commercial to residential conversions as a solution to both problems.

Green | Mar 25, 2024

Zero-carbon multifamily development designed for transactive energy

Living EmPower House, which is set to be the first zero-carbon, replicable, and equitable multifamily development designed for transactive energy, recently was awarded a $9 million Next EPIC Grant Construction Loan from the State of California. 

Adaptive Reuse | Mar 21, 2024

Massachusetts launches program to spur office-to-residential conversions statewide

Massachusetts Gov. Maura Healey recently launched a program to help cities across the state identify underused office buildings that are best suited for residential conversions.

boombox1 - default
boombox2 -
native1 -

More In Category




halfpage1 -

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021