Apartments.com Releases August 2022 Rent Growth Report

Today, Apartments.com – a CoStar Group company – published an in-depth report of multifamily rent growth trends for August 2022 backed by analyst observations.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220908005756/en/

Year Over Year Rent Growth, by Market (Graphic: Business Wire)

“After a 20-month run of positive monthly growth dating back to December 2020, the market finally witnessed negative asking rent growth on a monthly sequential basis from July to August, with rents down 0.1% in July,” said Jay Lybik, National Director of Multifamily Analytics, CoStar Group. “We’re seeing a complete reversal of market conditions in just 12 months, going from demand significantly outstripping available units to now new deliveries outpacing lackluster demand.”

YEAR OVER YEAR REMAINS POSITIVE, YET SHOWS SIGNS OF SLOWING

While sequential monthly rents posted negative, year over year rents remained in the green. However, the pace of deceleration picked up noteworthy speed with asking rents falling to 7.1% in August, down from 8.4% at the end of July. The current rent conditions highlight how the spring and summer leasing periods came up significantly short compared to pre-pandemic historical results.

FASTEST GROWING SUNBELT MARKETS WITNESS SUBSTANTIAL RETREAT

The Sunbelt region continues to have a strong hold on the market, home to six of the top 10 rent growth markets, according to Apartments.com. Yet, these same markets that had the fastest growing rents in 2021 are now witnessing the most dramatic pullback.

None of the top 40 largest markets saw year over year asking rents expand in August, pointing to the overall deterioration of market conditions. Palm Beach saw a dramatic slowing of growth, with asking rents decreasing from 30.6% in Q4 2021 to 8.2% at the end of August. Phoenix follows close behind with year over year rents dropping to 5.2% in August compared to 21.0% just eight months ago. Tampa and Las Vegas also witnessed rents retreating by over double digits so far this year.

MONTH OVER MONTH DATA REFLECTS DECLINE OF RENT GROWTH, SAN FRANCISCO NOSEDIVES

Sequential rents month over month paint the most striking picture of the deteriorating rental market. Only 13 of the 40 largest markets saw month over month rents holding positive or at zero. San Francisco rents declined the most in the past 30 days as far as absolute terms, down $29 or 0.9%, but Nashville led in percentage change, down 1.1% or $18. Orange County, on the other hand, saw rents over the past month rise 1.0%, adding $27 to the overall asking price.