Housing CPI Continues Hike In April – Neil Schimmel interviewed
Bisnow spoke with IMG Founder-CEO Neil Schimmel about his outlook for multifamily rent growth
WOODLAND HILLS, CA — May 14, 2023 — Despite 14 months of interest rate hikes, the housing cost growth in the United States has not reversed. In April, the consumer price index for shelter increased by 0.4% month-over-month, following a 0.6% rise in March. Rent for primary residences was up 8.8% compared to a year ago, reflecting the surge in rents due to overall inflation. While some projected that home prices had reached their peak, the data suggests otherwise.
Rent growth, although not as unsustainable as last year’s spikes, is still present in many areas. In some places, rent growth has returned to its normal annualized rate of 3% to 4%. The delivery of a record number of new units in development in 2022 and the threat of recession are factors that have kept apartment rents from rising significantly.
“Rent pricing trends are like fingerprints, unique to each region,” said Neil Schimmel, CEO of Investors Management Group, which owns and manages over 5,500 multifamily units nationally.
“The trends we’re seeing in our investment markets stem from a complex web of local influences, from economic conditions to demographic shifts,” Schimmel said.
Many Sun Belt submarkets are experiencing cooled-but-steady rent growth due to a diverse, resilient economy and high demand for housing, Schimmel said. Other regions, such as the Midwest, are seeing more moderate or even declining rent prices due to a supply-demand mismatch.
Big cities are also seeing rental rate growth as the pandemic recedes. New York City, for example, had the largest month-over-month increase in April, with rent up by 1.9%. People who have remained in cities or returned to them are seeking more space, which has helped sustain rental prices.
Factors such as the delivery of new units, economic conditions, and demographic shifts contribute to the unique rent pricing trends in different regions.
“We’re actively expanding our national portfolio, so having a deep understanding of emerging regional patterns is critical to making informed investment decisions,” Schimmel said. “We expect a shift to pre-pandemic standards of rent growth will foster a more sustainable, balanced apartment market.”
What Peak? Housing CPI Continues Hike In April
May 14, 2023 By Dees Stribling, Bisnow National
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