Effective rents for new leases in the U.S. apartment sector climbed 3.0 percent during 2012, according to MPF Research, an industry-leading market intelligence division of RealPage, Inc. (NASDAQ: RP). The annual rent growth pace slowed throughout the year, after the rate of increase reached 4.8 percent in 2011. MPF Research analysts highlight the nation’s latest apartment rent growth statistics as well as other key performance indicators that include a big jump in the number of units that will be delivered over the course of the near term in a discussion found at www.realpage.com/MPFQ4-2012-Report.
Rent growth over the past year remained a bit above the long-term norm of 2.5 percent recorded during the past two decades. An increase of 3.0 percent is similar to the average results posted during past periods when occupancy was sustained at strong and generally stable levels, according to MPF Research. Comparable annual price increases registered most recently from 2005 through the middle of 2008, and before that in the middle to late 1990s.
While U.S. apartment rents declined on average by a little more than 4 percent during the recession, they now have been moving upward for three full years. Late 2012 pricing topped the rates recorded in late 2009 by 10.5 percent.
“Property owners and operators generally aren’t pushing rents quite as hard as they were a year or so ago,” said Greg Willett, MPF Research vice president. “Many on the operations side of the apartment industry have focused on sustaining their very tight occupancy levels during a period when job growth and new household formation have been fairly sluggish at the same time that renter movement has begun to inch up from the unusually low levels experienced in the previous few years.”More renter movement in the apartment sector mainly reflects households opting for one apartment over another, according to the MPF Research analysis. Loss of renters to purchase in the now-improving for-sale housing market is having only a very small impact on apartment sector fundamentals, the firm’s research shows. “While the number of apartment renters opting to buy is rising a little, it remains far below the levels apartment operators were accustomed to prior to the recession,” Willett said. “Families that have been renting single-family homes, rather than apartments, comprise a big portion of the first wave of homebuyers seen in the cycle. By far the biggest component of the apartment resident base, particularly within large urban areas, consists of young singles living alone or young-couple households. Single-family homes just aren’t the right housing option for many of them, regardless of shifts in the pricing relationship.”
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV