Real Cap Daily #12 - Are Apartment Rents Rising or Crashing?
Are apartment rents rising or crashing? Every rental market is different, and requires a close analysis. According to the September rental report from Realtor.com, nationally rents are cooling.
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Apartment rents tend to rise in an inflationary environment. Are rental rates still rising? According to Realtor.com, the overall rental market rose 22.8% since September 2020, and only 7.8% in the last year. This means most of the rental increases happened in 2021. If you are paying attention, that was the height of the fed stimulus as well. Rental rate growth as a national average has slowed by almost 3 times with the large cities that people left showing the largest increases such as Boston, Chicago, New York, and Providence. These areas typically saw the lowest increase in rents during the past 2 years. Meanwhile, cities that had experienced double digit growth in 2021 have slowed dramatically. Here is a chart of the National Rent Trend by unit size. Nationally, studios are averaging $1,483, 1-bedrooms are $1,647, and 2-bedrooms are $1,941.
Each market is different. If you need help leasing your property, or would like to know the impacts of the rental increases on the value of your property, please reach out. I would be happy to give a free consultation.