Greycoat Real Estate keeps tabs on rental prices. Here is what they have to share. As the cost of living rises, rental prices are a topic of discussion. As the rental market evolves, landlords and renters want to understand the potential changes and trends.
Rents skyrocketed in 2021, which prompted developers to build apartments. Many are now complete and rents went down a little. The median rent in September was $1747 which was five dollars less than the previous month and $29 less than the peak in 2022. Greycoat informs how an apartment construction spree is responsible for the decrease in rental prices.
Builders completed 361,000 multifamily units in the first ten months of this year. That is an increase of 24 percent over the first ten months of 2022. In October, over 980,000 multifamily units were under construction and are likely ready for occupancy by the end of the year. Greycoat explains that the added availability brings the rental prices to a little more affordable place.
In 2023, rent growth struggled to gain consistent momentum. Operators focused on stabilizing occupancy instead of larger rent increases. Greycoat later informs that rents are up approximately two percent since last year, but normal seasonal trends indicate the figure at the end of 2023 to be less than two percent.
New supply is the strongest rent growth deterrent. A few changes are worth mentioning. Apartment demand increased in 2023 due to strong job growth and improved consumer sentiment. The most significant influence on the forecast for 2024 is the apartment units that remain under construction. When supply is ahead of demand, prices adjust downward. There is a modestly degraded expectation for rent prices in 2024; all things considered, Greycoat finally states, the prediction for 2024 is stable demand.