Headline rent growth rises while monthly rents cool, Jay Parsons notes

Headline rent growth rises while monthly rents cool, Jay Parsons notes
Base effects explain rent growth patterns

Jay Parsons examines the recent focus among apartment data analysts on base effects, which help clarify why headline rent growth, measured year-over-year, is increasing even as month-over-month rent trends show a typical seasonal slowdown.

In September, CoStar data indicated that rents declined by 0.08 percent on a month-over-month basis, underscoring this divergence in the rental market metrics.

Parsons has previously reported that apartment construction remains slow, with equity still limited and higher costs hampering new projects, according to recent trends in apartment starts. He also noted the merger between Centerspace and IRT, which created a larger apartment REIT with 44,000 units and expanded their presence in multiple U.S. markets, as detailed in an earlier update. Both developments contribute to ongoing changes in the U.S. multifamily sector.

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