Apartment Absorption Rate Weakened in 2022Q4
Apartment Absorptions Slightly Weaker in Fourth Quarter of 2022
According to data from the latest US Census Bureau Survey of Market Absorption of New Multifamily Units (SOMA), with additional analysis provided by the National Association of Home Builders (NAHB), demand in the multifamily market in 2022Q4 softened as the percentage of apartments absorbed with the first three months of completion fell to 59.0% after six consecutive quarters of being above 60.0% absorption.
The absorption rate of unfurnished, unsubsidized apartments (the share rented out in the first three following completion) declined two percentage points to 59.0% in 2022Q4. The number of completions was down from 2022Q3—from 85,830 units to 82,190—while completions were up 18% year-over-year.
The median asking rent for apartments increased from $1,821 in 2021Q4 to $1,863 in 2022Q4, a year-over-year increase of 2.5%. This marks the eighth consecutive quarter with an increase in the median asking rent.
The absorption rate of condominiums (the share purchased in the first three months following completion) increased in 2022Q3 by one percentage point to 78.0%, while condominium completions declined 10.3% on a year-over-year basis, from 5,760 units in 2021Q4 to 5,165 in 2022Q4.
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