The U.S. apartment market recorded moderate rent growth in the third quarter, with new lease effective rents rising 0.9% during the quarter and 2.6% annually, according to RealPage Inc.
In 2017, annual rent growth has been hovering between 2.5% and 3%, a pace that roughly aligns with the long-term norm, RealPage's chief economist Greg Willett said in a release.
During the third quarter, Sacramento, Calif., continued to lead the nation's largest metros in terms of annual rent growth for new residents, with rates climbing 6.9%, followed by Las Vegas and Orlando, Fla., with 5.8% and 4.8% rate increases, respectively. Following closely were Minneapolis/St. Paul, Minn., and San Diego, with respective rent growth rates of 4.6% and 4.5%.
The Atlanta; Dallas; and Charlotte, N.C., markets, which had been consistent rent growth leaders, did not make it to the top achievers list during the quarter as their respective rent increases slowed to 3.5%, 2.8% and 2.5%, respectively.
During the quarter, apartment occupancy remained tight, despite sliding at a rate of 20 basis points on a quarterly basis and 50 basis points year over year.
In the top 100 U.S. metros, average occupancy rate stood at 95.5% during the third quarter. Topping the list of apartment occupancy leaders was Minneapolis/St. Paul at 97.9%, followed by Providence, R.I., at 97.6%. Detroit and Sacramento were tied at 97.1%, and New York City rounded out the top five at 97.0%.
Jay Denton, vice president of RealPage's Axiometrics group, said occupancy usually peaks during the third quarter, but declines slightly at the end of the year because of seasonally slow leasing.
"We have some concern about how much occupancy could deteriorate during the next few months, given big blocks of new supply are set for delivery during the seasonal leasing lull," Denton said in a release.