Rises in apartment rents in the Sacramento region continue to pace the nation, according to a new report from research firm Yardi Matrix, but one group of renters has been more affected than others.
Specifically, much of the 8.5 percent year-over year rise is being felt by those defined as “renter by necessity,” according to Yardi Matrix. Those are the apartment units that are typically a bit older and often house people who rent them because they don’t have other housing options.
For those renters, the annual rise in Sacramento is 10.1 percent, or 4.2 percentage points greater than the “lifestyle” renters who do so by choice. The disparity figure was the fifth largest of any large U.S. metropolitan statistical area included in Yardi Matrix’s report.
“Roughly 80 percent of the new supply is in the Lifestyle segment, which is aimed at high-income millennials and downsizing Baby Boomers, while demand in many metros is driven by middle-class renters,” the report states.
All four cities ranked above Sacramento in the size of disparity between lifestyle and renter by necessity annual rent growth also had year-over-year growth above the national average of 2 percent. But none of those cities — Houston, Los Angeles, Dallas or Charlotte — had the year-over-year growth Sacramento did. The closest, Los Angeles, had 4 percent rent rises between April 2016 and last month.
Sacramento also continues to lag much of the country in new apartment supply, with .6 percent of the overall supply considered new in April. California’s Inland Empire, with the same .6-percent figure, was the only other metropolitan area nationally below 1 percent, and was second nationally in rent growth, at 5 percent.