Public Web Scraping Data Will be Available for Free Starting July 1 to Radix Clients Only.
Read more in our Press Release
We just launched the 2024 Midyear Review & Second Half Outlook.
Download today
Previous slide
Next slide
Radix Logo

Rent and Operating Trends Week of July 17th

Share this post :

Rent and Operating Trends Week of July 17th

Picture of Radix


Share This Post

Following another increase in annual inflation, economic prospects for 2022 have dampened significantly. The annualized CPI increased 9.1% in June, the highest price jump in more than 40 years. As a result, many forecasters now believe that inflation will remain persistent for some time. According to David Solomon, CEO of Goldman Sachs, inflation is deeply embedded into our economy and volatility is likely to remain through at least the end of this year. While the job market remains strong, with nearly 400,000 new jobs added across a wide variety of sectors in June, companies are beginning to tighten hiring as the expectation of a recession increases. The Fed will likely raise short-term rates 75 or 100 basis points next week, and all signs point to additional increases until inflation begins to cool.


Operating fundamentals are starting to weaken quickly as the economy softens. All key metrics were flat or negative on a week-over-week basis except for NER growth. While NER grew, its 10-basis point increase is the slowest weekly gain this year. Annual NER growth is down to 8%, marking a significant deceleration from early 2022. As interest rates increased, for sale properties are re-trading at discounts of 10-15% while other deals are falling apart completely. Lenders, especially those providing floating rate loans are requiring buyers to lock in expensive rate caps or increase interest escrow. As a result, returns are not penciling the way they were even 3-6 months ago for many deals.


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.


[dearpdf id="16148" ][/dearpdf]

About the author

More Posts

Picture of Radix
Radix is a data and advanced analytics provider for the Multifamily industry. Radix's data ecosystem is continuously building upon itself so that users from all levels of the industry can make smarter business decisions for their assets and investments using data from a transparent source, the property itself.
Scroll to Top
Get Your Midyear Multifamily Industry Review  

Stay ahead in the multifamily market with our latest insights and forecasts. Fill out the form to download your free report now.