Class A Rent Growth Remains Above 3%

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Rent growth in high-end apartments across the nation has accelerated over the last few quarters, pulling in line with – and at times above – growth in the Class C counterparts. In the year-ending 1st quarter 2019, Class A rents grew 3.1%, matching rent growth in Class C units. Class B rents grew at the fastest rate of 3.4%. That’s the second straight quarter in which annual rent growth in Class A stock topped 3%. Historically, the pace of rent growth went in class order with Class A rents growing the fastest, and Class C growing the slowest. Since 2013, the trend has changed as middle-market Class B rent growth has generally been the top performer. Meanwhile, unprecedented new supply volumes pulled rent growth in Class A units under 2.5% throughout 2017 and the first half of 2018. Only in the last three quarters has that luxury segment stopped lagging the others in terms of annual rent growth. Class A rent growth pulled even with that of Class C apartments in 2018’s 3rd quarter and surpassed it a quarter ago.