Rent Growth Remains Positive in the Northeast and Midwest

As apartment rent performance across the nation trends down, rent growth in the Northeast and Midwest is outperforming. The Northeast leads the U.S. with operators pushing effective asking rents 3.2% on average in the year-ending August 2023, according to RealPage Market Analytics. Following close behind, rents in the Midwest were up 2.7% in the 12-month period. While both of these performances were well above the U.S. average (0.3%), rates are still below five-year norms, which were inflated by double-digit performances in much of 2021 and 2022. While pricing power has been lost everywhere, however, the Northeast and Midwest performances remain positive, as operators in the South and West turn to rent cuts. Historically, rent growth in the Northeast and Midwest has hit at or below U.S. norms. Over the last five years, rent growth averaged 4.8% in the Northeast and 4.1% in the Midwest, both behind the U.S. norm (5.1%). These are obviously very different regions, in demographics, population and monthly rental rates. With expensive markets like New York, Boston and Newark, the five-year average for rents in the Northeast ($1,847) outpaced the U.S. norm of $1,555 by nearly $300. Conversely, rents in the Midwest ($1,176) ran about $400 below the national norm. As of August 2023, that performance story continued with Northeast rents ($2,210) above the nation’s norm ($1,824) and Midwest rents ($1,395) below the U.S. average.