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Single-family rents also declined last month, falling $8 to $2,115, marking a 0.7% year-over-year increase. This growth was solely sustained by the Renter-by-Necessity (RBN) segment, which saw a 3.2% increase year-over-year, while lifestyle rents saw a 0.1% decrease over the same period.
“One could say the multifamily market is metaphorically hunkering down for the winter as property owners face the prospect of weak near-term rent growth due to inflation, the loosening job market and a surge in deliveries in some markets, while values and capital markets liquidity deteriorate as interest rates remain higher-for-longer,” the report stated.
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Despite the recent slowdown, rents have increased by 23.5% since the pandemic began in March 2020. This slowdown is attributed to expanded housing stocks in certain areas and other affordability challenges. The report anticipates a balance in the market with planned housing deliveries over the next two years.
The Northeast and Midwest regions lead in rent growth, whereas the Sunbelt and West are lagging, with notable rent declines in some Sunbelt metros due to new housing developments. Posting the highest rent growth were New York City (6.2% year-over-year), Kansas City (4.0%), New Jersey (4.0%), Columbus (3.4%) and Chicago (3.2%).
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