The COVID-19 pandemic has accelerated the trend of people, especially the millennial generation, moving out of high-cost gateway markets. Pre-COVID, the millennial generation moved to be closer to family and/or start a family. After the onset of the pandemic, even more people began (and continue) fleeing high-cost gateway markets. For example, since many people are working remotely, they prefer the lower rent payments for a larger unit size rather than paying higher rents for a tiny apartment.
Many suburban, tertiary, and tech hub markets benefited from this migration trend in 2020. Markets with the most growth in 2020 include Sacramento (6.1%), Inland Empire (7.3%), Phoenix (4.6%), Tampa (3.9%), and Las Vegas (3.8), Boise (9.5%), and Scranton-Wilkes-Barre (7.8%), according to YardiMatrix.
2021 is a new year, yet many of the challenges from 2020 remain. Overall, YardiMatrix predicts rents will rise by 2.0% nationally in 2021 (compared to -0.8% in 2020). They predict rents will rise the most in Las Vegas (4.8%), followed by Salt Lake City (4.3%), Austin (3.9%), and Indianapolis (3.9%).
Investing in a market where rents exceed the national average is ideal. While you still want to make conservative rent growth assumptions based on a rental comparable analysis, market-driven rent growth allows multifamily investors to exceed their return projections.
Here are the 10 cities where rents are forecasted to increase the most in 2021:
![Where investor bought](https://www.bestevercre.com/hs-fs/hubfs/Imported_Blog_Media/Where-Investors-bought-Multifamily-During-the-COVID-19-Pandemic-100-1024x1024-May-24-2022-03-05-21-06-PM.jpg?width=1024&height=1024&name=Where-Investors-bought-Multifamily-During-the-COVID-19-Pandemic-100-1024x1024-May-24-2022-03-05-21-06-PM.jpg)
1. Las Vegas
![](https://www.bestevercre.com/hs-fs/hubfs/Imported_Blog_Media/Night_aerial_view_Las_Vegas_Nevada_04649u-1024x683-1024x683-4.jpg?width=1024&height=683&name=Night_aerial_view_Las_Vegas_Nevada_04649u-1024x683-1024x683-4.jpg)
YardiMatrix 2021 Rent Forecast % Change: 4.8% 2020 Rent % Change: 3.8%
2. Salt Lake City
![Salt-lake -city](https://www.bestevercre.com/hs-fs/hubfs/Imported_Blog_Media/Salt-Lake-City-Wikipedia-1024x576-May-24-2022-03-05-25-86-PM.jpg?width=1024&height=576&name=Salt-Lake-City-Wikipedia-1024x576-May-24-2022-03-05-25-86-PM.jpg)
YardiMatrix 2021 Rent Forecast % Change: 4.3% 2020 Rent % Change: 3.8%
3. Austin
![](https://www.bestevercre.com/hs-fs/hubfs/Imported_Blog_Media/GettyImages-501154548-Austin-58f12bc03df78cd3fc462c87-e1544468813595-May-24-2022-03-05-26-69-PM.jpg?width=960&height=640&name=GettyImages-501154548-Austin-58f12bc03df78cd3fc462c87-e1544468813595-May-24-2022-03-05-26-69-PM.jpg)
YardiMatrix 2021 Rent Forecast % Change: 3.9% 2020 Rent % Change: -3.6%
4. Indianapolis
![indian polis](https://www.bestevercre.com/hs-fs/hubfs/Imported_Blog_Media/Indianapolis-The-Manual-1024x576-May-24-2022-03-05-19-50-PM.jpg?width=1024&height=576&name=Indianapolis-The-Manual-1024x576-May-24-2022-03-05-19-50-PM.jpg)
YardiMatrix 2021 Rent Forecast % Change: 3.9% 2020 Rent % Change: 3.5%
5. Phoenix
![](https://www.bestevercre.com/hs-fs/hubfs/Imported_Blog_Media/Phoenix-AZ-TripSavvy-May-24-2022-03-05-28-51-PM.jpg?width=950&height=633&name=Phoenix-AZ-TripSavvy-May-24-2022-03-05-28-51-PM.jpg)
YardiMatrix 2021 Rent Forecast % Change: 3.7% 2020 Rent % Change: 4.6%
6. Winston- Salem
![Winston-salem](https://www.bestevercre.com/hs-fs/hubfs/Imported_Blog_Media/Winston-Salem-GroupTravelLeader-1024x681-May-24-2022-03-05-17-70-PM.jpg?width=1024&height=681&name=Winston-Salem-GroupTravelLeader-1024x681-May-24-2022-03-05-17-70-PM.jpg)
YardiMatrix 2021 Rent Forecast % Change: 3.6% 2020 Rent % Change: 6.6%
7. New Orleans
![Birmingham](https://www.bestevercre.com/hs-fs/hubfs/Imported_Blog_Media/New-Orleans-Parade-1024x640-May-24-2022-03-05-18-66-PM.jpg?width=1024&height=640&name=New-Orleans-Parade-1024x640-May-24-2022-03-05-18-66-PM.jpg)
YardiMatrix 2021 Rent Forecast % Change: 3.5% 2020 Rent % Change: 0.6%
8. Birmingham
![Birmingham](https://www.bestevercre.com/hs-fs/hubfs/Imported_Blog_Media/Birmingham-Tourist-Destination-May-24-2022-03-05-21-90-PM.jpg?width=1024&height=700&name=Birmingham-Tourist-Destination-May-24-2022-03-05-21-90-PM.jpg)
YardiMatrix 2021 Rent Forecast % Change: 3.4% 2020 Rent % Change: 2.8%
9. Sacramento
![sacramento](https://www.bestevercre.com/hs-fs/hubfs/Imported_Blog_Media/Sacramento-CA-The-Crazy-Tourist-1024x679-May-24-2022-03-05-25-07-PM.jpg?width=1024&height=679&name=Sacramento-CA-The-Crazy-Tourist-1024x679-May-24-2022-03-05-25-07-PM.jpg)
YardiMatrix 2021 Rent Forecast % Change: 3.4% 2020 Rent % Change:6.1%
10. Cincinnati
![](https://www.bestevercre.com/hs-fs/hubfs/Imported_Blog_Media/Cincinnati-OH-1024x640-May-24-2022-03-05-20-14-PM.jpg?width=1024&height=640&name=Cincinnati-OH-1024x640-May-24-2022-03-05-20-14-PM.jpg)
YardiMatrix 2021 Rent Forecast % Change: 3.3% 2020 Rent % Change: 2.2% Here is a data table summarizing 11 to 20:
Market | YardiMatrix 2021 Rent Forecast % Change | 2020 Rent % Change |
Atlanta | 3.3% | 3.0% |
Columbus | 3.3% | 2.3% |
Louisville | 3.3% | 1.8% |
Raleigh | 3.2% | 0.0% |
Richmond | 3.1% | 6.5% |
Memphis | 3.1% | 5.9% |
Tucson | 3.0% | 5.9% |
Nashville | 3.0% | -1.5% |
Tampa | 2.9% | 3.9% |
Houston | 2.8% | -1.9% |
Forecasts are never perfect
Not many people, if anyone, could have predicted that the market with the greatest rent growth in 2020 would have been Boise, Idaho. Therefore, a strong rent growth prediction should not be the only reason why you decide to invest in a market. However, like all forecasts, rent growth predictions are good guides to locating potential investment markets on which you perform a deep dive analysis.