Kansas City displayed healthy fundamentals going into the third quarter, sustained by the metro’s affordability and steady economy. Rents advanced 0.7 percent on a trailing three-month basis through June, and were up 5.2 percent year-over-year, marking one of the year’s strongest performances. Yet with an average rent of $1,241, the metro remained among the country’s more affordable markets. Meanwhile, the occupancy rate in stabilized properties held up relatively well, declining by 60 basis points in the 12 months ending in June, to 95.1 percent.
The Kansas City unemployment rate stood at 2.8 percent in May, a 10-basis-point increase since the start of the year, according to data from the Bureau of Labor Statistics. While it trailed Missouri (2.5 percent) and Kansas (2.9 percent), the metro led the 3.7 percent national rate. The economy added 34,500 positions in the 12 months ending in April, the equivalent of a 3.2 percent expansion and ahead of the 2.9 percent national rate. All sectors gained jobs, led by leisure and hospitality (10,700 jobs). Job growth was aided by increased visitor volume, which in 2022 surpassed pre-pandemic levels.
Developers had 6,890 units underway as of June. The number of construction starts almost tripled year-to-date as of June from the same period last year. Meanwhile, investment activity tapered off, with just $238 million in multifamily assets trading through June, for a price per unit that declined 22 percent.
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