Month-to-month apartment rents fell in August for the first time in nearly two years, sending another signal that the U.S. multifamily market is headed toward normalcy.
Asking rents fell 0.1% in August from July at the 40 largest U.S. apartment markets, according to a report released Thursday from CoStar Group's Apartments.com. The decline marks the first monthly decrease since December 2020, when the apartment industry was still dealing with the pandemic’s fallout.
None of the 40 metropolitan areas Apartments.com tracks saw an increase in asking rents in August, according to Apartments.com. The high-flying Sun Belt markets, six of which are in the top 10 in rent growth year over year, had the most dramatic declines in growth.
“The deteriorating rent situation highlights a significant collapse of demand in the sector when new unit deliveries are projected to hit 230,000 in the second half of 2022,” Jay Lybik, CoStar’s national director of multifamily analytics, said in a statement.
Year-over-year rent growth remained positive at 7.1% in August but slower than the 8.4% growth recorded in July. Orlando, Florida, held the top spot at 12.8% with Miami second at 12.4%, followed by Fort Lauderdale, Florida, at 11.1%.
Still, Orlando's year-over-year growth was significantly lower than its 16.2% growth in July. Orange County, where Orlando is located, has turned into a battleground for rent control, and voters could decide on the issue in November. Apartment owners have sued to halt that effort.
Rent control discussions from a variety of municipalities across the country have become a heightened concern among apartment owners as rents rise amid a shortage of housing, Sherry Freitas, senior manager director of property management for Atlanta-based firm RangeWater, said in an email to CoStar News.