Phoenix Multifamily Market Report
Phoenix Registered the Fastest Rent Climb in the Country as Robust Migration Strained Supply
Extremely tight vacancy powers U.S.-leading rent growth. Several demand drivers supporting the need for rentals converged to produce a record-setting performance in Phoenix over the past 12 months. Availability fell to a 20-plus-year low in the second quarter, providing a tailwind for rent to grow at a pace nearly four times as fast as the national gain during the yearlong period ended in June. More than 40,000 new households were created during that stretch, with relocations to the metro accelerating as job openings grew. A lower cost of living relative to West Coast cities and a favorable quality of life also motivated migration. Meanwhile, the median home price in Phoenix surged 24 percent in the past year, elevating the barrier to homeownership. A large portion of the demand from new residents is going toward apartments, which was evident in the historic second quarter improvement. Net absorption during the April through June time frame exceeded 5,500 units, the largest quarterly total in over 15 years.