Rising Multifamily Vacancies Slow Rent Growth
US apartment vacancies jumped in Q1 as a bundle of new units hit the market and slowed the growth of rent increases—but rent is still rising.
Effective rents climbed 4.5% in Q1 from a year earlier, down from 5% growth at the end of last year, and vacancy rates rose 4.5% from 4.4% last quarter, Bloomberg reports.
Builders completed 200,142 new units over the last 12 months—that’s the highest total in a single year since 1998. And not all of these are being filled—apartment occupancy in the 100 largest US metro areas rose by only 20,077 units in Q1.
But even with a glut of new apartments on the market (mostly being filled by Boomers), rent growth hasn't stalled completely—in Q1 new-resident rents spiked 5% from a year before, reaching an average of $1,260/month. [Bloomberg]
