U.S. Rent Growth Hits Milestone - RAOT Week of Nov 17th 2024

This is a weekly narration of our weekly Rent and Operating Trends Report


Slight Uptick in Inflation, but U.S. Economy Still in Good Shape

Based on data from the Bureau of Labor Statistics, consumer prices increased 2.6% in October from the prior year. Core prices, which exclude food and energy, increased 3.3% on an annual basis. Both numbers met economists’ expectations. Despite a slight increase in the headline inflation number, the report was viewed favorably by investors. 

Compared to a year ago, gasoline prices were down 12.2% in October and there was a slight decline in vehicle prices. Prices were up 4.5% for electricity and 8.2% for transportation services.

Rent growth for multifamily should come back into balance due to normalizing growth in consumer prices, strong wage growth, and a decline in new supply levels. 

Strong Retail Sales to Start Q4

The Commerce Department reported retail sales increased 0.4% monthly in October, and September’s growth was revised upward to 0.8%. It was a good sign headed into the holiday shopping season. Some of the strongest growth was in electronics and appliance stores, as well as auto dealerships.

According to a Reuter’s report, investors lowered the odds of the Fed cutting interest rates in December after the retail sales report. They dropped from roughly a 70% chance to about 60%.Multiple economic readings suggest the economy could be strong enough without the extra boostfrom the Fed next month. 

New Housing Data Released This Week

The U.S. Census Bureau’s latest housing report for new home sales and permits for residential construction, including multifamily, will be released today. The National Association of Realtors will release its monthly report on existing home sales on Thursday.

New supply readings for multifamily have trended downward throughout the year, setting up a window of lower supply in coming years. The single-family market has remained very unaffordable due to escalated prices and persistently high mortgage rates. 

Multifamily Highlights

Operational metrics were steady from the prior week, and it appears 2025 could be a bounce back year for many markets if the economy remains strong. So far, the industry has avoided any unusual erosion in performance through the first half of the fourth quarter. 

Leasing activity has been consistent each week since early September, and national annual effective rent growth had its first non-negative reading in 19 months. Rent growth was flat from the prior year, and it has showed incremental improvements since midsummer. 

The usage and value of concessions has receded in many markets on the front end of the industry’s recovery from sluggish performance last year.


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