Source: National Real Estate Investor
Apartment rents continue to grow more slowly than before. The cities where rents grew the most in 2016 are still top cities for rent growth this year, but their lead is getting smaller.
“A year ago there was a pretty big spread between Houston, which had rent growth of about 1 percent, and Sacramento, which was much larger –nearly 12 percent,” says Jay Denton, senior vice president with data firm Axiometrics.
Today, no major metro areas have annual rent growth of more than 10 percent. Rents are still growing the most in markets with new jobs and relatively few new apartments. Many of those markets are cities and towns that were hit hard by the housing crash. These are often places that have been growing in population. In addition, apartment developers have built relatively few new units in housing crash cities like Sacramento, Calif., and Las Vegas, creating less competition for apartment properties.
Rents grew just 2.2 percent on average in the U.S. over the 12 months that ended in the third quarter, according to a survey of 121 markets by research firm Yardi Matrix. That’s the slowest rate of increase since April 2011.