MRI Software Report Shows Multifamily Rent Pricing Aligns with Pre-Pandemic Expectations, Despite Intervening Disruptions

Solon, Ohio – May 22, 2024 – Despite the extreme ups and downs in the multifamily market over the past four years, today’s rental rates are roughly equivalent to those suggested in pre-pandemic forecasts, according to a Trendspotter report from PropTech firm MRI Software.

After evaluating data from over one million market-rate units, MRI found that during the height of the pandemic (March 2020 through June 2021), new lease rental rates lagged theoretical pricing for a market unaffected by a pandemic. In the second half of 2021, however, they jumped above the theoretical pricing.

“The ups and downs effectively balanced each other out,” says Brian Zrimsek,
Industry Principal at MRI Software. “In a world without a pandemic that continued to operate with modest annual rent increases, it is quite likely we would have ended up with the same rates we now have.”

Other notable findings of the report include:

• Flat growth for new lease pricing since January of 2023.
• A 10% increase in lease renewals in 2023 compared to 2019, along with decreases in renewal pricing.
• Increased premiums for month-to-month leases, with a 15% premium in 2024 to date versus a 10% premium in 2023.
• A minor increase in delinquencies since early 2020.

“Lower pricing for renewals indicates that landlords are focusing on tenant retention in a relatively stagnant market,” says Zrimsek. “Unless rents rise, landlords have less incentive to turn over a unit. The premium for month-to-month leases is another way of trying to avoid turnover costs.”

He adds: “The emphasis on tenant retention also means landlords will be more tolerant of renters who fall behind, provided that the renters pay up eventually. We’re already seeing more and more landlords embrace flexible rent programs like Best Egg and Flex for their residents. I expect this trend to continue.”

About MRI Software
MRI Software is a leading provider of real estate software solutions that transform the way communities live, work and play. MRI’s open and connected, AI-first platform empowers agents, owners, operators and occupiers in commercial and residential property organizations to innovate in rapidly changing markets. MRI has been a trailblazer in the PropTech industry for over five decades, serving more than six million users worldwide, including the public and affordable housing sector. Through innovative solutions and a rich partner ecosystem, MRI gives real estate companies the freedom to realize their vision of building thriving communities and stronger businesses. For more information, please visit mrisoftware.com.

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