The apartment market has reached never-before-seen levels of occupancy as more renters stayed in place and construction fails to keep up with demand.

Renters leased more than 97% of all professionally managed apartments across the country in December, the highest number on record, according to RealPage data reported by Bloomberg CityLab.

“I don't think most people realize just how crazy that is,” RealPage Deputy Chief Economist Jay Parsons told CityLab. "Not only is that a record, typically we consider 95- to 96% to be essentially full."

The occupancy rate rose 2% from December 2020, which was already a tight rental market as evictions were largely banned nationwide. The record occupancy has allowed multifamily landlords to raise rents.

Asking rents were up nearly 12% at the end of 2021 compared to the same period in 2020, according to Reis, which tracks the largest apartment markets in the U.S. In Sun Belt markets like Florida, Nevada and Arizona, landlords have said they have been able to raise rents after tenants move out by close to 40%.

Those sky-high rents may be driving the occupancy levels, convincing renters to renew leases rather than move and possibly face higher rent spikes, CityLab reported, noting that occupancy rates typically go down in the summer when people begin to move. Last year, occupancy rates rose steadily, giving those who are in the market for an apartment unit a smaller pool of choices.

The demand dynamic has led to a surge in homebuilding in November — 1.48 million units of single-family and multifamily, a level not since in the U.S. since the 1970s.

But the pandemic's effects on supply chains and labor shortages mean developers are taking longer to deliver new housing — apartment completions were at 60% of normal levels in November, according to Reis data, while absorption was at 90%.