Q1 2015 Rent Growth Stays Strong
Digested from “Momentum Carries into 2015’s 1st Quarter for U.S. Apartment Sector”
Property Management Insider (3/31/15) Parsons, Jay
Middle-market Class-B apartment communities continue to see the most rent growth, with a 5 percent year-over-year increase reported for Q1 2015. The occupancy rate for the quarter is 95.4 percent, up 10 basis points from Q42014 and 40 basis points for the year.
Completions for the quarter totaled 52,964, and absorption was 64,297. Since lease renewals hit a 10-year high in February 2015, these numbers indicate strong demand from new renters. Lease-ups in new buildings have slowed since the first half of 2014, but they are still “healthy,” according to Jay Parsons of MPF Research.
In the top 100 markets, 419,555 units were under construction in the first quarter. Even with increased supply, Parsons expects the occupancy rate to stay around 95 percent by the end of the year. A year from now, Greg Willett of MPF Research expects average growth to decrease to 3.6 to 3.9 percent.
Effective rents for Q1 2015 overall increased by 0.7 percent, which is equal to rent growth in the first quarter of 2014. Annual rent growth in Q1 2015 was 4.6 percent, the same as Q4 2014.