As the homeownership rate fell following the recession, the towers rose — the vast majority boasting luxury rentals, complimented by high-end amenities like rooftop dog parks, fitness centers, private movie theaters and party rooms. The amount of new supply that has been and will be delivered is extremely large and is forcing owners and developers to keep rents lower than they would like so they can remain competitive.
The average rent nationally in the third quarter was $1,289 per unit per month, compared with $1,251 in the third quarter of 2015. While that was a 3 percent annual increase, it was more than 2 percentage points below the 5.2 percent rent growth of one year ago, according to Axiometrics, a provider of apartment and student housing market intelligence. This drop is being driven almost entirely by cooling on the luxury end.