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Rent Growth Falls Back Below Long-Term Average in March

Occupancy Up for Second Straight Month

By Dave Sorter | Tuesday, April 11, 2017

After three months of stability and even increases, national annual effective rent growth retreated to 2.1% in March 2017, below the long-term average of 2.3% and the lowest rate since July 2010, according to Axiometrics’ apartment market data. 

March’s rate represented a 24-basis-point (bps) decrease from February’s 2.3% and a 204-bps drop from the 4.1% of March 2016. The retrenchment was widespread, with only 17 of Axiometrics’ Top 50 markets – based on number of units – recording increased rent growth from February, while one other was flat.

National Rent Growth

Just five metros had increases of more than 20 bps – including San Francisco, where a 148-bps rise brought the Bay Area metro back into positive rent-growth territory after eight months in the red. On the other hand, 28 metros sustained rent-growth decreases of more than 20 bps between February and March. 

The top gainers among Axiometrics’ Top 50 markets in March were:

Biggest Rent Growth Gainers

The biggest drops among Axiometrics’ Top 50 markets in March were:

Biggest Rent Growth Drops

Among smaller markets, Odessa had the largest gain, as its 543-bps increase to -1.6% not only removed it from the basement of the rent-growth chart, but also raised the metro above three other Texas markets. Corpus Christi took the bottom spot with -4.6%, with Houston one rung up at -3.4% and El Paso next at -3.1%. 

Occupancy Continues Rise 

The national occupancy rate increased for the second straight month in March, rising 18 bps to to 94.6% from February’s 94.5%. March’s rate was, however, 38 bps lower than the 95.0% of March 2016. 

The increase was to be expected, as occupancy has risen each March since the Great Recession ended.

National Occupancy Rate

Bar Lower for Top-Market Ranking 

One year ago, Sacramento assumed the mantle as the top rent-growth market among the Axiometrics Top 50 with a rate of 11.6%. Some 17 of the Top 50 metros are listed on the monthly chart, and the March 2016 table found West Palm Beach at No. 17 with annual effective rent growth of 5.7%. 

In a sign of how national and metro apartment markets have moderated over the past 13 months, that 5.7% that was the 17th-highest rate in March 2016 would place it No. 3 in the March 2017 rankings. Sacramento was still No. 1 for the 13th straight month in March 2017, but with 8.8% rent growth – some 280 bps below its March 2016 figure. 

The No. 17 spot in the latest chart belongs to Richmond, with 3.1% rent growth – 260 bps below the West Palm Beach figure that placed 17th in March 2016. In fact, Nos. 10-17 in March 2017 recorded rent growth at or below 4.0%. 

These differences are evidence of how the apartment cycle works. When it’s at its peak, the top markets have higher rent growth figures. When national rent growth reached its high of 5.2% in September 2015, the No. 17 market on our list was Tampa-St. Petersburg, at 6.6% rent growth.  

National rent growth is forecast to begin rising again in 2018 and 2019, and when it does the rate of the No. 17 market will likely rise along with it.

Meanwhile, the March 2017 table had some drastic differences from February’s list. Sacramento and Riverside maintained the top two spots, but Salt Lake City rocketed to No. 3 from No. 7, as Fort Worth fell from No. 3 to No. 6. Las Vegas fell from fourth to ninth.

The two surprise entrants in the February chart, Hartford and Charleston, SC, bounced right back off it in March with sharp rent-growth decreases. Indianapolis, Denver and Richmond returned to the list, as Jacksonville also fell off it.


Dave Sorter

Dave Sorter


Dave Sorter is an award-winning journalist who spent 30 years as a newspaper reporter and editor before joining Axiometrics. He oversees all Axio blogs and newsletters and serves as senior editor of all Axio publications.

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