This week, national metrics remained strong during the week after the Memorial Day holiday. Leading indicators continue to predict strong growth nationwide as we head into the summer months. NER notched another week of 80 basis point gains, rising to $1,737. National NER is currently only 2.4% below the pre-pandemic high and will close that gap by the end of the month if current growth rates are maintained. Allowing for a slowdown of growth rates, we predict that NER will set a new high by the middle of July.
Key Takeaways – Data as of 6/6:
- Traffic and Leases: National traffic and lease rates posted slight dips this week, dropping by 3.1% and 5.5% respectively. Even accounting for this dip, these metrics remain very strong and reflect that demand for multifamily housing remains strong even as the supply remains tight. o San Jose now claims both the most traffic, at 17.1 average visitors per week, and the highest lease rate, at 4.4 average executed leases.
- Occupancy and Leased Percentage: National Occupancy remained static this week at 95.7% while Leased rate bumped up by 20 basis points to 97.2%. o Chicago had the strongest month-over-month Occupancy growth for the second month in a row, once again posting a 1.1% increase. o Dallas had the strongest MoM growth in leased rate, rising by 1%.
- Net Effective Rent: As stated above, National NER gained 80 basis points this week, positioning it within striking distance of closing the gap on pre-pandemic peak NER. NER is up 3.1 % MoM. o Studio floorplans that declined the most during the pandemic, now are the biggest gainers both this week, rising 1.1% WoW, and this month, rising 3.3% MoM, suggesting renters’ appetites for denser living may be returning as the pandemic continues to wane and health restrictions are eased across the nation, particularly in metro areas where rents have risen dramatically over the last year. o Orlando and Miami claimed the top two spots for NER growth MoM, rising 4.7% and 4.3% respectively, showing that tenant demand in the Sunshine State remains high even as other states reopen their economies.