Reis reported Wednesday that the apartment vacancy rate in the US increased in 4Q 2015 to 4.4 per cent, up from 4.3 per cent in 3Q, and up from 4.3 per cent in 4Q 2014. The vacancy rate peaked at 8.0 per cent at the end of 2009, and appears to have bottomed at 4.2 per cent.
US Apartment Vacancy Rates: 4Q 2015
US vacancy once again increased by 10 basis points to 4.4 per cent during the quarter with construction slightly outpacing net absorption, said REIS Wednesday. Gradually, construction is overtaking net absorption by a wider margin, putting increasing upward pressure on vacancy. During 2Q construction exceed demand by 3,471 units. During 3Q that difference had risen to 12,350 units and during 4Q it registered 15,263 units.
On a calendar-year basis, rent growth continues to accelerate. Asking and effective rents grew by 4.5 per cent and 4.6 per cent, respectively, during 2015.This is greater than 2014’s growth rates of 3.7 per cent and 3.9 per cent for asking and effective rents and is the strongest performance during a calendar year since 2007 before the recession. The low vacancy rate, improving economy, tightening labor market and gradually rising income growth is providing all of the fodder for continued rent growth, even in the face of rising construction.