new year . Even so , price pressure has clearly taken a toll on apartment demand . almost $ 200 per month more than in March of 2021 .
Average effective rent growth was 2.5 % or more for all price classes with the exception of a 1.8 % gain in the Class D segment . Class A led the way with an increase in the period of 3.8 % up to $ 1,565 per month . For both Class B and Class C , the quarterly gain was about 2.6 %.
Despite softening demand , and likely at least partially thanks to continued elevated average occupancy , lease concessions continued to decline . About 16 % of conventional properties ended March offering some kind of lease concession package for new leases . This marked a dramatic reduction from about 40 % of properties offering 12 months ago and was also much lower than in the months leading into the COVID-19 pandemic two years ago . Similarly , the average discount package closed the quarter at less than two weeks off an annual lease after a small decline in the period . This year ’ s average was only slightly more than half that of the average from any March in the last five years .
Not only was market-level net absorption negative for the first time in years , but net leased units were shed in every price class except for Class A . The top tier , with generally higher incomes and a dearth of single-family supply boosting demand managed to avoid negative territory . However , it could not avoid turning in the worst opening quarter in more than five years from a demand perspective .
If the second quarter does not bring the typical bounce in apartment demand , it is likely that lease concessions may begin the re-enter the picture as household consolidation makes an impact on average occupancies . Rent growth cannot continue its current pace without a rebound in demand . With the probability of a recession in the next 12 months seemingly climbing by the week , 2022 looks to be a lot more volatile for multifamily than 2021 .
Takeaways
Thanks to high average occupancy , strong fundamentals , and aggressiveness on the part of operators with asking rents , rent growth momentum continued through the opening quarter of the
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