Rapidly rising home prices are being eclipsed now by rapidly rising rents.
Rental market data company Yardi Matrix reports nationwide, apartment rents across all classes in August were up more than 10% from a year earlier, the largest leap it has ever recorded and besting the previous record set in July by 4%.
In the D.C. metro and many other large cities, rents are rising even faster at the high end, with apartments more likely to attract so-called “lifestyle renters.”
“Lifestyles are renters that do not have to rent. In other words, lifestyle folks are discretionary, upper midrange renters. They could afford to buy, but they choose to rent instead,” said Doug Ressler, senior research officer at Yardi Matrix.
In the D.C. metro, year-over-year rent increases at lifestyle asset class apartment buildings average between 10% and 15%.
Those lifestyle renters also fled their city pads last year, driving rents in that class lower along with falling rents across all apartment types.
“There was a surge of vacancies in lifestyle apartments because those folks chose to move away when the pandemic began. Many of them had second homes,” Ressler said.
The other broad class of apartment assets is “renter-by-necessity,” or those that are renting because they cannot afford to buy. Average rents in that class in the D.C. metro are up close to 5% from a year ago, according to Yardi Matrix data.
Yardi Matrix has just published its August 2021 National Multifamily report online.
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