Labor shortages are hitting multifamily, too

A lack of construction workers has led to slowing unit delivery

Despite a prolonged multifamily growth schedule, there is still room for rent prices to go up, according to Yardi Matrix. A healthy job market means that economic growth will remain moderate, so rent gains should remain healthy in most metros.

Nationally, rent growth only dipped below the 2.5% long-term average early in the cycle. The report attributes the growing rent prices to a high occupancy rate and growing wages.

Construction workers needed

More than 1.5 million units have been delivered over the last five years, with an expectation of 300,000 units to be delivered in 2020.

Deliveries have slowed recently due to the labor shortage, slowing down housing and multifamily starts in 2019. However, Yardi Matrix says there is a growing supply of apartments in tech-heavy centers like Seattle, Denver, Raleigh and Nashville.

And across the nation, when new multifamily is built, it’s not staying empty long. Yardi Matrix says absorption remains robust in most markets, and the latest national occupancy rate of stabilized properties is near 95%. Rent growth is slowing in some markets as new supply gets digested.

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