Multi-family housing industry enjoying tremendous growth
The real estate market is booming across the United States, and the growth isn’t limited to single-family homes. Multi-family housing has seen remarkable increases in recent years, and the market continues to be strong for investors.
Multi-family housing is an attractive real estate investment. It continues to be a stable market as economic growth drives higher demand for housing across the country. A new Yardi Matrix report shows this sector continues to grow. Here are three factors the report outlines that make multi-family housing a strong investment in 2018.
Rent prices are up
Average monthly rent prices increased in July to the highest point ever in the United States. According to a Yardi Matrix report, average rent was up $3 from the previous month to $1,409, an increase of $41 year over year. The multi-family real estate market continues to grow along with the strong economy. Higher rent prices are helped by the fact that most apartments have stayed occupied, even as new buildings are rapidly built. In 2017, more than 400,000 new apartments were finished, providing ample supply for eager renters.
Occupancy rates continue to increase
While rising rent costs could be seen as detrimental to occupancy, the opposite has been the case this year. Occupancy rates have continued to increase as monthly rent has gone up, according to Yardi. Average occupancy has increased to 95 percent in major markets, even as the supply of multi-family residences grows. High occupancy rates have remained steady, remaining near 95 percent in both 2017 and 2018.
Rent is increasing steadily across the country
Increasing rent and occupancy rates are not limited to one area of the country. The Yardi report drew data from 127 markets across the United States and focused on the 30 largest metro areas. The data showed an average increase of about 3 percent in rental rates, with some markets even higher. Orlando led the country with a 6.9 percent increase. Las Vegas, California’s Inland Empire and Phoenix showed increases of 5.8, 5.5 and 4.9 percent, respectively.
The strong and growing economy in the United States is fueling demand for housing, both for single-family and multi-family options. Rising rent prices and occupancy rates make multi-family housing a profitable investment in many markets around the country. According to the report, multi-family housing remains a favorable industry as secondary markets enjoy strong economic conditions and people migrate to promising housing markets.
