US Apartment Absorption Rate: 4Q 2018

US Apartment Absorption Rate: 4Q 2018

In 4Q 2018, the building of 56,950 apartment units in the US was completed, an -18% decline from 4Q 2017, when it was 69,640 units. (Figure 1 below). Apartment completions in 4Q 2018 were at their lowest point since 4Q 2013.

These data come from the US Census Bureau, in collaboration with the US Department of Housing and Urban Development, under the Survey of Market Absorption (SOMA). The SOMA contains data on completions of nonsubsidized, privately financed apartments in buildings with five or more units and their absorption rates (the share of apartments rented out in the first three months after completion). This data provides a view into supply and demand dynamics in the multifamily market.

In 4Q 2018, there were 5,370 condominium completions in buildings with 5 or more units in the US (Figure 2 below). This is +23% higher than the amount completed in 4Q 2017 when it was 4,364. Condominium completions have been trending upwards since 2015, although remain below historic norms.

Seventy-nine percent of condominiums completed in 4Q 2018 were sold in the first three months of 2019, the same absorption rate of condominium completions from the 4Q of 2017.

The median asking sales price of condominiums was US$469,000 in 4Q 2018, inching up +3% from the median asking sales price of US$467,200 in 4Q 2017. — US Census Bureau and US Department of Housing and Urban DevelopmentSurvey of Market Absorption

In previous updates, completions of affordable housing units, such as low-income housing tax credit units, were reported out. However, going forward that data will only be released on an annual basis, as opposed to quarterly.

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