Owners of multifamily buildings charged an average monthly rent of $1,419 in December, 3.2 percent more than in December 2017, Yardi Matrix reported.
The average monthly rent is expected to increase nearly 3 percent this year, according to the Yardi Matrix report.
The division of real estate software publisher Yardi Systems based its rental housing report on an analysis of 127 large real estate markets across the United States.
Yardi Matrix reported that the average rent in a multifamily building has risen 31 percent since 2011 amid increasing home prices, a robust economy and an expanding market for rental housing.
“Multifamily could be taking a trajectory much like hotels, which have had nine consecutive years of above-trend revenue growth,” Yardi reported.
Though impressive, fast-rising rent “breeds worry that the cycle has extended almost as far as it can,” Yardi reported. “Real estate rarely has performed so well for so long.”
Yardi predicted that multifamily rent will increase in 2019 at the fastest rate in the South, the West and the Southwest, where the demand for housing has been exceeding the supply.
The annual number of U.S. household formations is 1.1 million, more than the number of new homes that developers are building, according to Yardi.
Student loan debt and higher interest rates also are deterring home sales, forcing many young people to remain renters and avoid home ownership. [Inman] – Mike Seemuth