Apartment data provider Axiometrics predicts that annual effective rent growth in 2017 will match the long-term average, however they say performance will strengthen in 2018 & 2019. Their latest forecast estimates an average rent growth of 2.3% this year, equaling the average rate from 1995-2016 and actually 10 basis points (bps) higher than their previous forecast. This slight increase also comes in the wake of a predicted fall in the job-growth rate to 1.4%, with 2.01 million jobs added to the workforce in 2017.
Their key takeaways:
- While average effective rent growth will hit a recent low of 2.3% this year, it is expected to rise to 3.2% in 2018 and 4.1% in 2019 before moderating back to 3.2% in 2020 and 2.6% in 2021.
- Job growth also will increase in 2018 and 2019, to 1.7% and 2.0%, respectively. Like rent growth, this metric is expected to retrench to 1.7% in 2020 and 1.4% in 2021.
- Occupancy is expected to average 94.6% in 2017, rising to 94.8% in 2018 and 95.2% in 2019, exceeding the magical 95% at which a market is considered full. That rate is predicted to fall to 95.0% in 2020 and 94.7% in 2021.
- The total number of building permits issued is forecast to rise to 1.4 million this year, but fall to 1.3 million in 2018 and 1.2 million in 2019. This includes all housing, both single-family and multifamily.
Click here to read the full report on Axiometrics.com.
