Rent and Operating Trends Week of July 17th

Key Takeaways – Data as of 07/17/2022

Traffic and Leases:

• Traffic fell or remained flat in 25 of the top 30 markets last week, a clear indication that apartment demand is waning across the nation. Nationwide, the average property had 8.5 tours last week, and traffic has declined each week for more than a month. 

• On average 2.7 leases were signed per property last week, and the national average conversion ratio has ticked down to 31%. 
• Houston and Dallas are still seeing decent traffic numbers, as both metros averaged more than 11 tours per property last week. However, with roughly 3.5 leases signed per property, their metro average conversion ratio is just in line with the national average.  

 Occupancy and Leased:

• Occupancy nationwide dropped 6 basis points last week. 
• It appears as though occupancy has reached its 2022 peak of roughly 95.5% nationwide and will likely continue to decline throughout the remainder of the year. This year’s peak was about 75 basis points below last year’s peak occupancy rate. 
• Leased percentages also continue to fall but remain elevated by historical norms. The national leased percentage was 96.8% last week.  
• Suburban occupancy and leased percentages remain stronger than their urban counterparts in many markets across the country including, Los Angeles, San Francisco, Denver, Dallas, and Washington D.C. 

Net Effective Rent:

• Net effective rent growth continues to decelerate, posting one of the slowest weeks of the year last week. Nationwide rents increased 10 basis points and the national average rent sits at $1,916. 
• Some coastal gateway markets including San Francisco and Washington D.C. continue to lag the national average, as each market has seen NER grow just 4.9% year-over-year. Washington D.C. was one of a handful of metros where rents actually declined last week. 
• Previously fast growing markets including Jacksonville and Phoenix have also fallen in the national rankings with each market growing slower than 8% annually.