U.S. multifamily rents increased $2 in February to $1,426 and year-over-year growth remained at 3.6%, as January was revised upward from 3.3% to 3.6%, according to

Yardi Matrix multifamily national report.

Annual growth is the highest it has been since late 2016, the report states.

A February survey of 127 major U.S. real estate markets shows that demand, bolstered by a job market with low unemployment and accelerating wage growth, shows no signs of slowing. Demand is most pronounced in metros with strong population gains and healthy job growth.

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Phoenix (8.0%) has taken over the top spot in the rankings, edging out the former leader, Las Vegas (7.9%). Sacramento, Atlanta and the Inland Empire also have year-over-year growth topping 5.0%. Portland, Kansas City and Houston are the only metros below 2.0% growth year-over-year.

The U.S. homeownership rate increased to 64.8% in the fourth quarter, a 60-basis-point increase over the previous year.

‘The age group with the largest growth in homeownership is 35-to-44-year-olds, giving rise to the question of whether older Millennials are ready to settle down like their parents.’ the report says.

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The preferences of the 80 million-strong Millennial generation has ramifications for the multifamily industry, especially since development is focused on urban and infill locations.

The latest numbers “are evidence that the market has strength to perform well for a while, even if the economy or other commercial real estate segments slow down,” the report says. “Occupancy rates have ticked down slightly, but absorption has been no problem.”

SOURCE Yardi Matrix