Amongst the most unprecedented 18 months of recent memory, the fight against COVID-19 continues. With the latest surge of the Delta variant of the Coronavirus, and even with seemingly daily changes to moratoriums and evictions, multifamily properties thrive and are experiencing growth at an exponential rate. Multi-Housing News, and Yardi Matrix report that there are multiple factors contributing to the rise of multifamily housing popularity.
The Eviction Moratorium Continues
The CDC has recently announced the eviction moratorium is being extended to certain areas hit especially hard by the pandemic. The August 3, 2021 Order prohibits landlords nationwide from evicting certain tenants through October 3, 2021. The extension of the moratorium has created serious concerns for multifamily property owners, as solutions for landlord assistance have not been provided.
“Studies by Moody’s Analytics and the National Equity Atlas (NEA) put the number of renter households that are behind on rent payments at $6.4 million. Moody’s estimates that at midyear, tenant households owe an average $4,270 in back rent totaling $27.5 billion, while the NEA estimates that the average household in arrears owes $3,300 totaling $21.3 billion.”
Supply, Demand, and Rent Increases
Despite these legal changes, the demand for multifamily apartment rentals has increased dramatically. The lack of housing being built during the lockdown and the uncertainty of the market causing renters to stay put are just a few of the factors at play.
“Year-to-date through July, multifamily asking rents jumped 8.3 percent, the largest increase in decades, according to Yardi Matrix data. Year-over-year, asking rents are up more than 10 percent in nearly half of the top 30 metros, while rents are rebounding rapidly in Gateway markets that saw steep drops during the pandemic.” - Paul Fiorilla, Multi-Housing News
Rent prices have increased 10% year-over-year in nearly half of the top 30 metros reviews by Yardi Matrix, and metros that experienced significant drops due to the pandemic are now quickly rebounding.
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