US Apartment Completions Continue to Increase in Q1

According to the US Census Bureau’s latest Survey of Market Absorption of New Multifamily Units (SOMA), with additional analysis provided by the National Association of Home Builders (NAHB), the percentage of new apartment units that were absorbed within three months of completion rose from a decade low of 42% in 2023Q4 to 53% in Q1.

The percentage of apartments absorbed within three months has fallen significantly from its peak of 75% in 2021Q3. Currently, the rate stands at 53% which is coupled with an uptick in completions, as SOMA estimates show a historically high level of completions at 99,120 units in Q1. This is well above the level of completions a year ago, which stood at 83,140

The pace of multifamily units being completed has picked up, as many units under construction over the past year are reaching the market. Since 2022Q1, completions have been above 75,000 for eight consecutive quarters.

Apartment units completed in 2023Q2 were 94% absorbed within a year following completion. The trend remains the same for the 12-month period as the other time periods, as it peaked in 2021Q3 at 98%.

The absorption rate for new condominiums and cooperative units rose to 69% in Q1. However, this was 10 percentage points lower than absorption rate of the same quarter last year. Total completions of new condominiums and cooperative units, according to SOMA, fell to the lowest level since 2022Q1, marking 3,312 completed units. Quarterly completions of these units peaked in 2018Q2 at 7,996.