Renting as a Lifestyle Choice Seeing Greater Rent Growth than Renter by Necessity

Posted on October 20, 2021

sunny dining roomLifestyle rents continue to outpace renter-by-necessity rents by a 13.4% nationwide growth rate compared to 9.5%, according to September data from Yardi Matrix.

Overall, year-over-year rent growth was seen in all 30 major markets covered by Matrix. Phoenix, Tampa, Las Vegas and Miami rents led the way, each registering extraordinary annual asking rent growth greater than 20% in September.

Primary markets are beginning to gain momentum, as well. Even though they rank near the bottom of Matrix’s top 30 markets, year-over-year rent growth between 4% and 8% is welcome for markets such as San Francisco, New York, Los Angeles, Chicago, Boston and Washington, D.C.

In September, the top 15 markets for annual rent growth were all in the Sun Belt, while coastal and Midwestern markets made up the lower half of our top 30 rankings. However, Eastern markets such as Baltimore (11.4%) and Philadelphia (9.7%) are experiencing record increases.

Looking below the top 30 markets, Florida secondary markets rise to the top, as migration and low in-place rents drive growth in the Sunshine State. West Palm Beach (28.8%), the Southwest Florida Coast (27.1%) and Jacksonville (22.6%) are in the top 5 of all 140 markets tracked overall by Yardi Matrix.

Asking rents nationwide continue to break records, though the market shows signs of deceleration. Nationally, asking rents were up 11.4% year-over-year in September. However, monthly rent growth was $16, a rate of 1%, which is the lowest monthly gain since the market began to accelerate in March.

Single-family (built-to-rent) rents continue to grow at an even faster pace than multifamily, with national rents up 14.3% year-over-year. Occupancy keeps rising as well, up 1.2% year-over-year.

The U.S. apartment market continues to set record growth rates, as asking rents increased 11.4% on an annual basis in September. Rents are at an all-time high of $1,558, up an astounding 11.1% year-to-date through three quarters. Said a panelist at an NMHC event this week: “In 40 years, I’ve never seen rent increases like we’ve seen these last few months. Never.”

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