Multifamily Market Continues to Experience High Demand, but Absorption Rate Declined in 2022Q3
Apartment Absorption Rate Falls but Remains above 60%
Information from the US Census Bureau’s latest Survey of Market Absorption of New Multifamily Units, with further analysis provided by the National Association of Home Builders (NAHB), reveals that the multifamily market continues experience high demand, with apartment completions reaching their highest point since 2021Q3. The absorption rate of new condominiums reached 82.0%, the best rate since 2013Q3. The NAHB notes that with low single-family housing supply and increased unaffordability in the for-sale market, many would be homebuyers have turned to or remained in the multifamily market.
In 2022Q3, the absorption rate of unfurnished, unsubsidized apartments (the share rented out in the first three months following completion) declined by 11 percentage points to 62.0%. The number of completions increased from 76,970 units in Q2 to 85,190 units in Q3. Year-over-year, completions were down 1.4%.
The median asking rent for apartments increased from $1,722 in 2021Q3 to $1805 in 2022Q3, a year-over-year increase of 4.8%. The Q3 increase marks the seventh consecutive quarterly year-over-year increase in the median asking rent price.
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