Phoenix Remains a National Rent Growth Leader, Just on a Smaller Scale

Phoenix is still holding on to its reign as the nation’s rent growth leader, despite seeing progress drop off significantly in April. Over the past year, Phoenix commanded a notable rent growth lead among the nation’s top-performing apartment markets. However, rent growth came down across the nation in April, in response to the COVID-19 pandemic, and Phoenix was the hardest hit. Operators in the market slashed rental rates by 2.4%, the steepest monthly decline among the nation’s largest 50 markets. Recent rent cuts in Phoenix dampened the annual performance, which went from 7.8% in March to 3.8% in the year-ending April. While well below the progress from much of the past two years, however, Phoenix’s recent performance still led the showings in the nation’s top 50 markets. Helping Phoenix stay ahead for rent growth, occupancy has remained strong, coming in at an April rate of 95.9%, remarkably high for a market that has historically struggled with vacancies. Phoenix suffered some of the steepest rent cuts nationally during the last financial crisis before rising from the ashes in the economic upcycle. So it is to be seen if this market holds onto the strides made in recent years, or falls back into decline.