Renter incomes continue to grow, but the pace is moderating … and interestingly, the moderating pace of growth mirrors the trend in asking rents. Still, this is an encouraging trend for renter affordability — with household incomes among new lease signers up 8.1% year-over-year in November.
This data is specific to market-rate, professionally managed apartments (which cater to mid- and upper-income renters) and looks at household incomes from lease applications versus the effective asking rents for new leases.
Of course, the sheer number of lease signers was significantly higher in 2021 than it is in 2022 — given the historic wave of demand in 2021 followed by the big slowdown this year. That’s a remarkable part of the story that hasn’t gotten widespread notice… that the demand wave of 2021 was notable not only for its size, but also the big incomes behind those numbers. It’s also a big reason why rent collections have held up consistently better in this segment of the rental market than what Census HPS has shown from the broader rental pool.
Remember this data (neither rent nor income) will match Census data on the overall population, since market-rate professionally managed apartments cater to mid- and upper-income renters
Randolph is a Multifamily Investment Sales Broker with eXp Commercial servicing Multifamily Buyers and Sellers in the Greater Chicago Area.