Summer Net Rent Growth Continues

Rising rents have been the subject of much conversation in the multifamily industry this year. As the summer approaches a close, the industry has now seen three consecutive months of net rent per unit growth above 2% per month after previously notching zero such months going back to the start of 2020.

As always, all numbers reflect conventional properties of at least 50 units.

National View

At the national level, average net rent rose by 2.2% in July to close the month at $1,366 per unit. Because net rent accounts both for average occupancy and average effective rent, part of the gain came thanks to the 0.4% increase in national average occupancy to just over 93%. However, the bulk of the increase was derived from rent growth. Average market rent rose by 1.5% in July, signaling continued bullishness on the part of operators. Average effective rent rose by 1.8% during the month, thanks in no small part to the continued abatement of lease concessions. A 15% monthly decrease in discount availability left only about 12% of conventional properties offering a discount to close the month.

Price Class View

While the 1.8% gain for Class C properties nationally and the 0.8% increase for Class D properties were significant monthly movement in their own right, the real energy was within the top two price tiers. Class A average net rent per unit rose by 4.5% to $1,813 per unit in July. A 1.6% average occupancy gain played a role, along with a 2.9% increase in average effective rent. Aiding rent growth was not just a larger draw down in concession availability, a 19% decrease, than the nation as a whole, but also an 8% decrease during the month in the average discount value.

In the Class B space, a 2.4% increase in average effective rent propelled average net rent up by 3.4%. Though not quite as large as in Class A, this subset of properties also managed a 0.9% uptick in average occupancy. A 20% monthly drop in concession availability for this group was the largest of the four price classes and the 3% decrease in the average discount value was second only to Class A.

Market View

Lake Charles, LA led the way in July with an average net rent gain of 5.6%. Other areas at the top of the list were Flagstaff, AZ and South Bend, IN with gains of 4.8% and 4.5% respectively. In terms of larger markets, Austin grabbed the top spot with an increase of 4.5% for the month. Following Austin were Tampa and Denver – Colorado Springs with appreciation of 4% and 3.8% respectively.

On the other side of the coin, some markets did continue to lag during the month. Some new supply in Rapid City, SD sent net rent tumbling by 17%, though a previous average occupancy of 99% was hardly sustainable and the new property has not yet had time to lease up. Laredo, TX was also near the bottom of the list with an average net rent decline of 2.3% and Pensacola, FL suffered a 1% loss in July to round out the bottom three.

Larger markets that struggled some in July include Minneapolis – St. Paul with a 0.3% gain during the month as well as the Buffalo – Rochester – Syracuse and Cincinnati – Dayton markets which added 0.5% and 0.8% respectively to average net rent.


Nationally, average net rent gains have sustained a level over the last few months not seen since prior to a rocky 2020. Though the increases have been driven predominately by effective rent appreciation, average occupancy has continued its uptick as well.

Unsurprisingly, the top two price classes continued to lead the way in growth for July. Even so, a monthly increase of nearly 2% in the seventh consecutive month in positive territory for the Class C space is a development likely to prompt more discussion about affordability concerns.

At the market level, the top performers in July posted numbers those in the industry are more accustomed to seeing on an annual basis than monthly. More than 130 markets were in positive territory for the month, and less than a handful lost ground to the tune of 1% or more. Even for the outlier, Rapid City, causes unrelated to market fundamentals led to the loss.

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