According to Apartment List, rents grew by 1.9% nationally in April 2021, which is the greatest month-over-month growth since 2017 (which is when Apartment List began collecting data). Another commercial real estate analytics company, RealPage, said, “effective asking rents for US apartments climbed 1.3% in April, rising at the fastest pace seen during a single month for the past decade or so and likely at the fastest pace ever.”
No matter how you put it, April 2021 was a record-breaking month for multifamily rent growth!
For perspective, rents dropped by 1.2% nationally from March to June 2020 due to the coronavirus pandemic. This decline wasn’t overcome until March 2021, where rents increased by 1.4%, a record at the time. Adding in the 1.9% rent growth in April, the year-over-year rent growth of 2.3% is the second-highest since Apartment List began collecting data in 2017.
In other words, “the recent growth in [Apartment List’s] national rent index has now reversed the disruption experienced in the early stages of the [COVID-19] pandemic.”
Here are some other takeaways I got from the report:
- Rents in hard-hit markets continue to rebound: For example, rents in San Francisco were down 26.6% from March 2020 to January 2021. Since January, rents have increased by 8.5%, including a 3% increase in April 2021. Other hard-hit markets like Boston (4.3% rent growth in April), Chicago (4% rent growth in April), Seattle (3.6% rent growth in April), New York (2.7% rent growth in April), and Washington DC (1.4% rent growth in April) are experiencing a similar trend.
- Boise still holds the spot for most rent growth during the pandemic: Rent has grown by 23% between April 2020 and April 2021 in Boise, ID, including a 5.2% rent growth in April 2021. Other top markets include Fresno, CA (13% YoY rent growth), Spokane, WA (13% YoY rent growth), Gilbert, AZ (12% YoY rent growth), and Toledo, OH (12% rent growth).
- There has been a convergence of rents in pre-pandemic expensive and affordable cities: Essentially, there has been a correlation between pre-pandemic rent levels and rent changes during the COVID pandemic. The higher the pre-pandemic rent, the more it fell. The lower the pre-pandemic rent, the more it rose. Consequently, the expensive markets are more affordable while the more affordable markets have become more expensive.
To review Apartment List’s full April 2021 rent report, click here.
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.