Booming Rental Market Sets New Records
July 27, 2015
The rental market zoomed to new highs in June as rental prices continued to surge. The national annual effective rent growth rate was 5.1 percent in June, a 47-month high for the national apartment market, according to Axiometrics.
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Effective rent growths have been at least 5 percent for five consecutive months, the longest streak since Axiometrics began its annual tracking of annual apartment data in April 2009.
"Rent growth is just shy of the post-recession peak, and the June metrics reflect the continued strength of the apartment market," says Stephanie McCleskey, Axiometrics vice president of research. "The demand for apartments is still strong, despite the record number of new units being delivered this year."
What's more, occupancy rates remained at 95.3 percent in June.
"Tight occupancy is why landlords can push rents higher," McCleskey says. "Axiometrics considers a market or property essentially full at 95% occupancy, so there are just not that many apartments available. There's a reason for all the new supply: The market is still playing catch-up for all the apartments not built during the recession."
Axiometrics reports the following markets had the highest effective rent growth in June:
- Oakland, Calif.: 14.4% (annual effective growth in June 2015)
- Portland, Ore.: 13.6%
- Denver: 10.9%
- San Jose, Calif.: 10.4%
- Sacramento, Calif.: 9.8%
- San Francisco, Calif.: 9.1%
- Riverside, Calif.: 7.6%
- Seattle, Wash.: 7.5%
- Atlanta, Ga.: 7.3%
- Phoenix, Ariz.: 7.1%
Source: "Rising Rents Hit 47-Month High, June Occupancy Matches Record," Real Estate Economy Watch (July 17, 2015)
Updated: November 23, 2020