Dallas-based Axiometrics recently released its latest monthly market performance data and the results show that new units hitting the market have not really made a dent in rent growth thus far.
According to the report, national effective rents increased by only 0.54 percent in July. That makes the year-to-date increase in rents 4.42 percent. But if you look at last summer, the growth is a bit behind this year. Last July was the peak of rent increases, with a 5.32 percent figure. Since last November, rent growth has consistently hovered around the 4 percent mark.
Axiometrics sees the gradual moderation of rent growth and occupancy rate, which also remain largely unchanged, as a trend that will continue moving forward as opposed to drastic up and down swings. But things could easily change as new supply hit the market in the coming months.
“Interestingly, new supply is also just now really starting to hit the market in a big way, so at this point it can’t be faulted for the moderation in rent growth, especially as some markets—like Houston, Southeast Florida, Nashville, and Denver—are actually seeing growth rates higher than they were a year ago," said Ron Johnsey, president of Axiometrics. "The performance of the apartment market between now and next spring will provide a better idea of how the new deliveries are impacting existing product, as close to 89,000 new units will be delivered between now and April 2013.”
The rate of new deliveries is currently on a fast track, with 56,000 units going online by the end of 2012 and about 129,000 units hitting the market in 2013.