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US Rents Heat Up in July

US Apartment Rents Continue Upward Climb

Was July’s rental market as hot as July’s weather in 2018? That might depend on who you ask. Some report strong rent increases in some cities, while others seem to be taking a quick dip.

The economy, rental property market participation, new multifamily construction units, and the seasons are all key factors in driving rent prices month to month.

We took a look at rent price reports from several research sources and they presented a conflicting picture about what happened in July. And when we begin tracking prices for 1, 2, or 3 bedroom rental properties, and for different cities across the nation, the picture can become more confusing.

This graphic below shows rents across the US continue on the rise despite record numbers of new construction apartments being released.  The demand for rental property is not expected to cease although construction is waning. Price rises are well below the records of 2015 to 2017.

Screen Capture courtesy of Apartmentlist.com

Zumper, Apartment List, Yardi Matrix and Zilpy Reports

In July, US rent prices rose slightly according to reports from Yardi Matrix. Zumper on the other hand reports that rents rose only slightly, while Zilpy reports a fall in July rents. Obviously each reporting firm uses data collected from different sources.

The fact they differ is okay since it helps us create a broader and more realistic view of the rental property market here in the US. If you’re gauging how your properties are performing, whether you’ve priced them properly, or are trying to forecast your rental yields for the years ahead, the extra data can give you a better three dimensional view of your investment situation. A little inconsistency keeps us on our toes.

Top Cities Still Show Strong Price Growth

Let’s start with Zumper’s report on the latest rental apartment prices. They report that San Francisco saw a 1.7% growth in 2 bedroom units while New York saw its 2 bedroom stock rise .6% while strangely, San Jose saw its 2 bedroom units fall .3% in price.

Perhaps not surprisingly, cities in the Midwest and rustbelt are seeing the largest rent prices. Aurora, Syracuse, Des Moines, Knoxville and St Louis saw big increases. As we discussed in the US rental property market report, these are some of the up and coming cities economically and rent prices would be expected to follow suit.

Zumper cited Oakland, CA, Fort Lauderdale, and Providence as having large reductions in rents. 2 bedrooms fell 3.2% in July and 1 bedroom units dropped a scary 5% in Fort Lauderdale. These are drops that are worth investigating.

Rent Cafe says demand in South Florida is brisk and that price reductions won’t last because of demand and reduced new construction. Fort Lauderdale was seeing sharp spikes in rent last spring, so this could be a monthly mild correction. South Florida’s average rents were growing by about 6% YoY.

Zilpy reports monthly drops in prices for 1 and 2 bedroom apartments nationally around 1% while 3 bedroom units were flat for the month.

Screen Capture courtesy of Zilpy

Top Performing Rental Markets in July

This data from Zumper’s most recent rental market report shows very strong growth for two bedroom rentals. The 2 bedroom market is the property type in demand from renters and property investors. Growing job security and wages may be resulting in more renters choosing to buy homes and this would free up 2 bedroom apartments, condos and townhouses.

July Rank from Zumper City Price M/M % Price M/M %
1 Denver, CO $1,430 -2.7% $2,080 5.1%
2 Buffalo, NY $1,060 -2.8% $1,330 4.7%
3 Spokane, WA $730 4.3% $900 4.7%
4 Irving, TX $1,170 0.9% $1,620 4.5%
5 Lincoln, NE $700 4.5% $930 4.5%
6 Glendale, AZ $750 1.4% $1,000 4.2%
7 Shreveport, LA $640 0.0% $740 4.2%
8 Syracuse, NY $910 3.4% $1,070 3.9%
9 Washington, DC $2,160 0.9% $2,770 3.4%
10 Des Moines, IA $870 3.6% $910 3.4%
11 Norfolk, VA $830 2.5% $1,000 3.1%
12 Sacramento, CA $1,230 3.4% $1,440 2.9%
13 Milwaukee, WI $920 -1.1% $1,120 2.8%
14 Akron, OH $600 0.0% $760 2.7%
15 New Orleans, LA $1,400 -0.7% $1,590 2.6%
16 Houston, TX $1,280 -1.5% $1,650 2.5%
17 Henderson, NV $1,070 1.9% $1,250 2.5%
18 Tucson, AZ $630 0.0% $850 2.4%
19 Portland, OR $1,460 0.7% $1,790 2.3%
20 Boise, ID $910 1.1% $970 2.1%

 

You can drill down last month’s rental price details on the respective websites of Apartmentlist, Yardi Matrix, Zilpy and Zumper for specific cities across the US.  Please view and share our 2018 US rental market report and California housing reports too.

See our other posts on the property management market, best cities to invest in rental property, best property management software, cloud software, and Property management automation.

The rental property management market is an exciting market for investors looking for premium ROI.  The high potential of rent yields in some cities makes your research worthwhile. Enjoy your time on the ManageCasa property management blog.

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See also: Property Management for Realtors |  California Housing Market | San Jose Housing Market | Cloud Property Management Software | Positive Cash Flow Properties | Best type of Rental Property? |  UK Housing Market | Australia Housing Market 2019 | Toronto Housing Market | Toronto Condo Prices | Multifamily Housing | Los Angeles Rent Prices |  Online Rent Payment | HOA Management Software | San Francisco Apartment Prices | New York Apartment Prices | Housing Market | Apartment Rent Prices | Best US Cities for Rental Property | Grow Rental Property Yield 

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