Despite apartment rent growth in Philadelphia gravitating toward its long-term average in late 2023, it still ranks among major metropolitan areas with the highest annual rent growth figures at 2.4%. Of the 15 largest U.S. apartment markets, only Chicago and Boston have seen apartment rents increase at a faster rate than Philadelphia.

However, rent growth for apartments varies widely across the Philadelphia region. Supply-constrained suburban neighborhoods have continued to see notably strong rent growth, while urban neighborhood clusters that are seeing the highest level of multifamily construction have seen rents stagnate at last year’s levels. This includes neighborhoods such as Northern Liberties, Kensington, Fishtown and the Delaware River Waterfront, which have collectively seen more than 4,000 rental units added to the market over the past year.

Conversely, suburban communities that have seen limited new supply have experienced some of the most substantial rent growth. Lower Chester County leads the pack with a remarkable 7.3% spike in average rent growth, followed by Cecil County with 5.8% and Central Bucks County with 5.6%. These markets each added fewer than 60 new units in the past year.

Other popular suburban neighborhoods commanding topdollar rents have also seen rent performance exceeding the regional average of 2.4%. Main Line, Conshohocken and King of Prussia all recorded above-average rent increases of 3.5%.

The higher-than-average rent increases for apartments in Philadelphia’s suburban areas have propelled the region to see some of the highest annual rent growth among the country’s largest apartment markets.

Interested in additional insights about the CRE market in Philadelphia? Download your free issue of the November 2023 BID Magazine, all about Pennsylvania!