Though the multifamily rental industry struggled at the start of the COVID-19 pandemic in early 2020 as rising unemployment left many residents unable to afford rent, the market made a strong recovery in 2021 with a total of 673,000 units rented for the year. As growing vaccination rates and a stabilizing economy offer greater financial security at the start of 2022, rental demand is reaching new highs, according to Construction Dive.
Remote work flexibility is also causing a migrational shift across the U.S., leading to rent increases in Sun Belt cities like Phoenix, Las Vegas, and Tampa. In early 2020, residents of coastal cities like New York and San Francisco relocated for more space and affordability, and Sun Belt markets saw substantial growth as a result.
Even with rental increases in these Sun Belt cities, industry executives argue that they still represent relative values compared to coastal cities (even with declines in those markets).
"Some of that [rent increases in the Sun Belt] is a result of migration and demand," said Matt Ferrari, co-chief investment officer and head of acquisitions and East Coast asset management for California-based TruAmerica Multifamily. "There are more people moving to these places because they're affordable."