Sky-high apartment rents are finally beginning to crack.
Annual gains in the first quarter were still a relatively strong 4.1 percent nationally, but that is a significant drop from the 5 percent gains the market was seeing one year ago, according to Axiometrics. The first quarter rate was also 52 basis points lower than that reported in the fourth quarter of 2015. Rent growth has been 4 percent or higher for seven-straight quarters, but wage growth is nowhere near strong enough to meet the gains, leaving renters more cash-strapped than ever before.
Rent gains had been strongest in some of the largest metropolitan markets, and they are now the first to see the easing. Younger workers, priced out of these markets, have been choosing smaller cities, and now rents in those cities are strengthening.