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Apartment Gains Despite Seasonal Lulls

U.S. multifamily market improves in January.

The average U.S. rent fell $1 in January to $1,463, marking the third consecutive month of declining rents, according to the Yardi Matrix Multifamily National Report. Still, U.S. multifamily rents increased 3% year-over-year in January 2020.

"The slight month-over-month decline in rents can be attributed to seasonality and could continue for the next few months, until we move into spring," Yardi wrote in the report. "Occupancy dipped slightly to 94.8% but remains within range of 95%."

The overall trends were solid. Sixteen of the country's top 30 markets posted year-over-year rent growth above the national average and none experienced a decline.

Phoenix (7.4% rent growth) and Las Vegas (5.4% rent growth), markets that were hit hard in the recession, maintained their year-over-year rent growth leadership for the 16th consecutive month in January. Sacramento, Calif., California's Inland Empire and Nashville, Tenn., rounded out the top five metros. Nashville and Charlotte, N.C., the No. 6 entries, have benefited from corporate relocations from higher-cost cities. Boston was the lone Northeastern market in the top 10.

National supply deliveries figure to decline this year as "multifamily construction originations are at a five-year low and the increased cost of labor and materials continues to be an issue," according to the report.

Still, there are concerns in some markets. Potential impediments are "regulatory risk, as evidenced by statewide rent control [California, New York and Oregon] and increased local regulation on security deposits [Cincinnati], and resident acceptance criteria [Seattle]. However, this risk does not present an insurmountable barrier nationally," according to Yardi.