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New Apartments Lease Up at Second Slowest Pace on Record
Just 47% of newly constructed apartments completed in the fourth quarter of 2023 were rented within three months, according to a new report from Redfin. That compares with 60% a year earlier and is the lowest seasonally-adjusted share on record aside from Q1 2020, when the onset of the pandemic brought the housing market to a halt.
“New apartments are taking longer to rent out because there are a lot of them hitting the market, meaning building owners are competing with one another for tenants,” according to Redfin. There were 90,260 new apartments completed in Q4 of last year, second only to Q2 of last year in records dating back to 2012.
For the past three quarters, the rental vacancy rate has hovered at 6.6%. That’s the highest level since 2021, though Redfin pointed out that it’s worth noting that the vacancy rate is no longer growing like it was during the pandemic.
Although apartment developers have pumped the brakes on the number of projects they’re starting, with multifamily building starts now below their 10-year historical average, completions are still near their record high because there were so many construction projects kicked off during the pandemic moving frenzy that are just now reaching completion, according to Redfin.
- ◦Development
