At the start of 2022, the U.S. national apartment occupancy average is just over 96% with an average monthly rental rate of about $1,650. The apartment market today is in a strong position for continued growth and stability for the year ahead.
In 2021, the apartment market had record-breaking leasing activity that was supported by increasing employee pay and a competitive homeownership market, which made renting more attractive. These economic factors are expected to continue this year, which is a positive for apartment owners and investors. The housing market should remain competitive as demand continues and new home construction has yet to return to the pre-Great Recession levels. Apartment renting on average will continue to be a desirable and more affordable option for many Americans. Even with increasing rental rates over the year ahead, we will still see strong occupancy and demand for quality apartments. The national effective rent is forecast to increase about six percent across the country over the year ahead and ten percent (or greater) in select markets in the U.S.
Market Spotlight: Orlando, FL
Population growth and job growth are expected to continue for the year ahead, which will support apartment demand. About 70,000 jobs are projected to be filled in 2022, which is about a five percent gain compared to last year. By the end of 2022, employment levels in six of the ten employment sectors should be at or above the January 2020 pre-pandemic high. The tourism industry is expected to experience increased visitor demand compared to 2021 and, ideally, get back to pre-pandemic visitor levels to help fuel local economic growth. Orlando is expected to have about 96% occupancy and $1,575+ average monthly rental rates in 2022.
Market Spotlight: Charleston, SC
Similar to Orlando, Charleston’s diverse economy, with newly created job opportunities and population growth that has increased 25% in the past decade, has resulted in strong apartment fundamentals. Volvo and Mercedes-Benz are two of the headliner companies creating new jobs as they have invested a combined one billion dollars for new local manufacturing sites, employing about 2,600 people today with the potential addition of 1,400 more workers in the years ahead. Not only is Charleston known for manufacturing, but it’s also building a reputation for technology jobs, too. Known as Silicon Harbor, Charleston’s technology sector is anchored by Google’s growing campus in Berkeley County. (On a side note, our property Hudson Cane Bay is in Berkeley County.) Charleston has already experienced high rental rate increases recently, but the market is still expecting a seven and a half percent increase this year. Charleston is expected to have about 96% occupancy and $1,525+ average monthly rental rates in 2022.