RENTCafé: February Multifamily Rents Increasing Fastest in Small Markets
SANTA BARBARA, CALIF. — The average rent for a multifamily unit in the United States was $1,364 this February, a 2.7 percent year-over-year increase, according to Santa Barbara-based RENTCafé’s latest monthly Apartment Market Report.
The cost of renting one-, two- and three-bedroom units increased by 3.2 percent year over year, and by 0.2 percent month over month. This number outpaced rents for studio apartments, which only grew by 2 percent year-over-year and remained stagnant for the month. The average price of a studio apartment across the U.S. in February was $1,258, while the average national price for a three-bedroom unit was $1,649.
RENTCafé’s Apartment Market Report is based off of data compiled from actual rents charged in the 250 largest cities in the U.S., coupled with data from multifamily software program Yardi Matrix. The report is based on apartment data related to buildings containing 50 or more units in cities with populations over 100,000, and a rental stock of at least 2,900 apartments.
In this report, large cities are classified as having a population of 600,000 people or more; mid-sized cities are cities with a population between 300,000 and 600,000; and small cities are cities with a population of less than 300,000.
Of the top 20 cities with the fastest growing rents, 19 are small cities, led by Odessa, Texas, up almost 40 percent year over year. Midland, Texas, comes in at a close second with rents up by more than 35 percent year over year.
The third through fifth fastest growing rental markets in the U.S. rounding out the top five include Lancaster, Calif., which experienced 11.1 percent rent growth year over year; Reno, Nev., with a 10.3 percent increase; and Fort Collins, Colo., which saw rents increase by 9.9 percent.
The top five slowest growing rental markets include Lubbock, Texas, where rents decreased by 4.8 percent year over year; Norman, Okla., which saw a decrease of 2.7 percent; Baton Rouge, La., where rents dropped by 2.1 percent; College Station, Texas, which saw a decrease of 1.2 percent; and Stamford, Conn., which saw rents down 1.1 percent.
Eighty-seven percent of the nation’s largest 250 cities saw rents grow year over year, with 11 percent of cities seeing rents remain unchanged and only 2 percent experiencing rent decrease.
Among the largest U.S. cities, Las Vegas, Denver, and Detroit had the fastest rising rent prices this February. Comparatively, rents in New York City, and Austin and El Paso, Texas, saw the slowest rising prices.
Of the nation’s mid-size cities, the top five fastest growing rental markets included Sacramento, Calif.; Colorado Springs, Colo.; Stockton, Calif.; Mesa, Ariz.; and Arlington, Texas. Comparatively, the top five slowest markets for rental growth included New Orleans; Cleveland; St. Louis; Mesa, Ariz.; and Arlington, Texas.
New Orleans was the only mid-size city to see a decline in rent prices this February, with rents lowering by 0.7 percent.
RENTCafé ranks cities in Colorado, Nevada and Arizona among its watch list of fastest growing markets. Colorado is a recurring presence in the top five fastest-rising rents in every market category. In total, seven Colorado cities saw rents increase by more than 5 percent over the year, including Fort Collins, Greeley, Arvada, Colorado Springs, Boulder, Denver and Aurora.
Las Vegas, North Las Vegas and Reno, Nevada, have also been very visible on the national rental scene with some of the fastest rising rents in the U.S., alongside Arizona, which had five cities where rents increased by more than 5 percent in the last year. These cities include Peoria, Gilbert, Mesa, Phoenix and Chandler.
“Population migration is occurring to affordable Southern and Southwestern states where economic growth is outpacing Northern regions,” says Doug Ressler, Yardi Matrix senior analyst. “A recent study by RedFin shows that people are leaving high-tax coastal markets like San Francisco, New York and Los Angeles in search of homes in more affordable metros with lower taxes like Sacramento, Phoenix, Las Vegas and Nashville.”
— Katie Sloan