This March apartment rents went up by one-quarter of 1% on a month-over-month basis, according to Yardi Matrix, which is more than double the increase from January to February and a much bigger escalation than what has occurred to date in 2023.
That is typical for the spring and early summer months, Yardi Matrix says, but in other ways asking rents are behaving a bit differently this season, the firm says.
The first difference is in the magnitude of increases.
In March 2020 asking rents dropped precipitously. In contrast, during the prior decade of 2010 to 2019, they had increased 62 basis points on average during the same first quarter. Compared to that period, this year’s growth is only 61% of the average recorded in the earlier decade.
When data is compared for Lifestyle versus Renter-by-Necessity residents, the Lifestyle segment realized an average of six basis points of growth for the asking rents during the first quarter of this year, which is 11% of the average growth when compared with the earlier time frame of 2010 to 2019. But the Renter-by-Necessity asking rents increased by 66 basis points in the first quarter, or about 91% of the average growth of the apartments during the same time period.
Where growth also occurred varied by location. Mid-sized markets in the Midwest and Northeast are experiencing better-than-average growth but Western and Southwestern markets are performing below average growth. Those experiencing 2% growth this year are mostly in the Midwest and Northeast and specifically in Worcester-Springfield, Mass., Portland, Madison, Wis., Youngstown and Dayton, Ohio. Two other markets witnessing such growth include Manhattan and Midland-Odessa, Texas. Both of those locations are described as outliers because of Manhattan’s size and the oil and gas industries driving the economy of the west Texas cities.
To date, the worst performers are markets like Phoenix, Salt Lake City and Colorado Springs. And the biggest downward changes were in mid-sized Southern markets such as Asheville, N.C., Wilmington, Del., Charleston and Knoxville, Tenn., while upward changes occurred most in mid-sized Midwestern and Texas markets that are outperforming expectation, including Lubbock, Texas, Tulsa, Okla., Wichita, Kan., Fort Wayne and Dayton.