Why the apartment boom won't bring down rent for many
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Across the country, renters with the deepest pockets are more likely than others to score a deal.
Why it matters: A flood of new construction is pushing down U.S. rents at the high end, where there are often more apartments than renters who want them.
The big picture: Demand for more affordable apartments is helping to keep middle-of-the-road rent prices elevated.
- Rent for middle-tier apartments nationally was up at the end of 2023, according to real estate firm CoStar Group, which rates buildings based on design, amenities, location and certifications.
- U.S. rents generally are still above pre-pandemic levels, analysts say.
State of play: While the country needs more housing, most new apartments are loaded with amenities in prime locations.
- Around 89% of the units completed from 2020 through 2022 are high-end, per RentCafe.
- The high-rises that some areas built in recent years include perks like rooftop bars, pet decks and towel service.
What's next: It could be a few years before there's enough demand to soak up the excess supply that's overwhelming some markets like Austin, Texas and Phoenix, says Jay Lybik, CoStar's national director of multifamily analytics.
- "We've got to get these buildings finished, and start filling them, without having more come online," Lybik tells Axios.
Be smart: Prices you see in the headlines are asking rents, meaning new leases only.
- Rents usually don't come down for those who aren't moving, Axios' Emily Peck reports.
The intrigue: It's not just rent deals. Another way to help fill fresh apartments is to hire an influencer.
- Dallas-based content creator Kenzie Elizabeth recently promoted a high-rise there, and some off-campus apartments use student ambassadors.
What we're watching: The pipeline for new projects is already slowing as developers find it harder to get financing.
Go deeper: Housing was wildly unaffordable for half of renters in 2022, report shows
