Apartment Rents Remain Steady Despite New Inventory
Apartment vacancy increased slightly to 4.7 percent in the first quarter, an increase of 0.1 percent from the fourth quarter of 2017, according to data released by Reis Inc. The vacancy rate was up 4.3 percent from one year earlier, while the average apartment rent increased by 3.9 percent.
Both figures indicate that the rental market has cooled from its recent peak. In 2015, rent growth reached a high of 5.8 percent. The vacancy rate reached a low of 4.1 percent in the third quarter of 2016.
Only one metropolitan area—Chattanooga, Tenn.—saw a decrease in rents during the first quarter as compared to the fourth quarter of 2017. Smaller markets which experienced the largest declines during the housing bust continue to recover. Phoenix, Ariz., Sacramento, Calif, and Charleston, S.C. all experienced the highest increases in rent growth at 1.5 percent for the quarter.
In 2017, the U.S. added approximately 1.5 million new owner households, resulting in a decline of renter households by 76,000. With the new tax bill and home construction likely to pick up, challenges for landlords remain and the vacancy rate is likely to tick higher, according to Barbara Byrne Denham, a senior economist at Reis.
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