Through the Lens: A Look at Apartment Rents, Home Prices and Incomes in Real Terms via Property Management Insider

Strong performance in the multifamily sector of late has raised some concerns about affordability. The concerns are very much centered on trends over the last four years, as annual same-store effective rent change for the top 50 U.S. metros has outpaced the rate of inflation for 17 consecutive quarters. And in 3rd quarter 2014, annual effective rent change for the top 50 metros came in at a two-year high of 3.7%, more than twice the reported annual rate of inflation.

However, before sounding the alarm, it’s useful to look at apartment rent growth with a zoomed-out lens – viewing rent growth relative to inflation, wage growth and single-family price growth over multiple cycles. This zoomed-out view paints a very different (and perhaps surprising) picture. It shows that even post-housing bust, single-family appreciation has far outpaced apartment rent growth since 2002.

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