June 15, 2021
Joe Fairless

Third Straight Month of Record-Breaking Multifamily Rent Growth

According to Apartment List’s most recent national rent data, May marked the third straight month of record-breaking rent growth.

Rent grew by 2.3% in May, the largest increase since Apartment List has recorded data. The previous high was 2.0% in April. Prior to that, the high was 1.4%.

1. Rents now exceed pre-pandemic projections.

Prior to the pandemic, Apartment List made projections for rent growth in 2020 and 2021. Due to three straight months of record-breaking rent growth, current rents are now above the level they projected they would have been if the pandemic-related price declines of 2020 had never happened.

2. Rents continue to recover in hard-hit COVID markets.

The cities with the largest rent declines during the pandemic have yet to fully recover to pre-pandemic levels. However, most have experienced positive rent growth over the previous four months. This trend continued in May, with rents increasing by 3.8% in San Francisco (down 17% since March 2020), 4.4% in Boston (down 6% since March 2020), 3.7% in Seattle (down 11% since March 2020), 4.1% in New York (down 12% since March 2020), and 1.6% in Washington, D.C. (down 9% since March 2020).

3. Rent growth continues to accelerate in mid-sized affordable markets.

The same 10 markets have topped the list for greatest rent growth since the start of the pandemic. For example, in Boise, ID, rents grew by 6.6% in March for an overall increase of 31% since March 2020. The other top markets are Spokane, WA (22% rent growth), Fresno, CA (17% rent growth), Mesa, AZ (16%), and Virginia Beach, VA (16%). However, all of these markets performed well prior to the pandemic. For example, in Mesa, AZ, rents grew by 25.5% from January 2017 to 2020 — the fastest rent growth in the nation over that period of time. Eight of the 10 cities with large rent increases during the pandemic were in the top 20 for rent growth between 2017 and 2020.

4. Pandemic rent changes resulted in more affordability.

The markets with the greatest rent decrease during the pandemic were the most expensive markets pre-pandemic. Conversely, the markets with the greatest rent increases during the pandemic were the most affordable markets pre-pandemic. As a result, there has been a convergence of rents in the most expensive and most affordable markets.

Check out Apartment List’s full May 2021 rent report 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.

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