Rent Growth Tapered (Slightly) in September

National multifamily demand had been on a shallow downward trajectory since the 2021 peak of about 94,000 net absorbed units in May, but September was the first time since April that monthly absorption dipped below 60,000 units. September was also the first month to see a decline of more than 10,000 units in net absorption from the prior month.

This continued decline was not unexpected. Multifamily is a highly seasonal industry, and demand is typically strongest in the summer months. Even so, the impact on monthly rent growth was clear. Monthly gains of nearly 2% from June through August were followed by a 1.6% increase in September – the lowest since a 1.6% gain in May. These demand and rent growth declines are, of course, within a broader context of generational demand and rent growth so far in 2021.

Largest Markets Continue to Lead

ALN assigns every US market to one of four tiers based on multifamily unit count, with Tier One markets being the 33 largest in the country. These markets saw a September average effective rent gain of 1.7% following three consecutive months of 1.9% growth through the summer. Despite the largest markets continuing to lead the way in monthly rent growth, all four tiers managed a 1% gain or more in September. Tertiary markets realized the smallest gain, right at 1%.

Among the Tier One markets, there were some standouts. In particular, the larger metros across the South and Southwest. Tampa and Orlando led the way, with a monthly gain of 3.7% and 3% respectively. Austin was not far behind at 2.7% and Las Vegas and Phoenix each added 2.6% to average effective rent. Dallas – Fort Worth, Atlanta, and Raleigh – Durham also hit 2.6% for the month. On the other end of the spectrum Chicago and San Francisco – Oakland closed September with a 0.7% increase while Minneapolis – St. Paul managed only a 0.6% gain.

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Rent Growth Remains Strongest in the Top Price Classes

The 2.3% average effective rent increase for Class A units matched that from July, but July was sandwiched between a 2.6% monthly gain in both June and August. Class B appreciation was 2.1%, the lowest monthly value since May. Each of the top two tiers remain in the midst of a streak of monthly gains in excess of 2% – currently five months and counting.

For Class C properties, rent growth fell from 1.6% in August to 1.3% in September.  As with the Class B space, September growth was the lowest since May, but these properties have now enjoyed six straight months of effective rent growth above 1% per month. Class D movement was much the same, just on a different scale. The 0.5% September gain was the lowest since March, but Class D properties have now seen monthly rent growth of 0.5% or more for six consecutive months.


After a roller coaster 2020, the multifamily industry has fallen back into a typical seasonal cycle in 2021 – albeit with larger numbers essentially across the board. Apartment demand is typically highest in the summer months, with especially robust rent growth in the second and third quarters. In September, monthly net absorption finally retracted to a non-trivial degree after five months of consistently eye-popping numbers. Along with it, rent growth began to tail off slightly.

As has been the case since the multifamily recovery began, the largest markets and the top price tiers remain the main drivers of the growth. It should be remembered that secondary and tertiary markets proved more resilient on the rent front in 2020 than the largest markets. With average effective rent growth through the first nine months of the year already at 11.5%, it was only a matter of time until growth finally slowed somewhat. September was not much of a slowdown, but qualified as one, nonetheless.

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