After pandemic surge, apartment rent growth in San Antonio expected to slow in 2023

After spiking during the COVID-19 pandemic, the rise in San Antonio rental rates is expected to slow in 2023 as inflation squeezes tenants’ wallets and a slew of new apartments are built.
Average rents increased 3.7 percent in 2019 and 1 percent in 2020 before climbing 15.5 percent in 2021, according to figures presented to the San Antonio Apartment Association.
That annual increase “is unheard of,” said Cindi Reed, director of sales at
Average rents rose another 6 percent in 2022, as building owners benefited from higher mortgage rates and home prices, which prompted some prospective buyers to continue renting.The pace of growth, however, is predicted to return to pre-pandemic levels this year — welcome news for tenants. Rents could remain flat or rise up to 3 percent, Reed said.Will McIntosh, global head of research at USAA Real Estate, said rents rose as much as 20 percent in some cities during the pandemic. “At some point, you’re pricing yourself out of the market, and tenants will go, ‘I can’t pay that,’” McIntosh told the trade association.USAA Real Estate is investing in building more “workforce housing,” which is aimed at tenants earning 80 to 100 president of the median household income in a given area, McIntosh said.The company also wants to expand its focus on affordable housing, for which it would seek public-private partnerships to build, he said.In San Antonio, McIntosh expects rents to increase 2 to 3 percent this year. Reduced growth in rental rates reflects the recent decline in absorption and an influx of new apartments flooding the market.