Apartment Vacancies Hit Five-Year High
By Laura Kusisto
The apartment market in the U.S. remained sluggish in the third quarter as the vacancy rate climbed to its highest level in five years.
In all, apartment vacancy rates increased in 50 of 79 metropolitan areas, with many major cities experiencing high levels of construction that outstripped demand, according to data released this week by apartment-tracker Reis Inc.
The vacancy rate for apartments across the U.S. climbed to 4.5% in the third quarter from 4.1% in the same quarter a year earlier, according to Reis.
"I think that's a sign of what's to come for the rest of the year," said Barbara Byrne Denham, a senior economist at Reis.
Construction activity was lower than expected, due in part to severe labor shortages, suggesting there may be more pain ahead as units continue to come online. Hurricanes created disruption in Florida and Houston, which may delay completions in two major markets.
In Houston, rents increased 1.1% during the quarter and the vacancy rate fell 0.1%, but those data don't yet include the effect of Hurricane Harvey.
Charleston, S.C., suffered the biggest increase in the share of empty units, with a 2.6 percentage point jump in the vacancy rate from a year earlier.
The New York, Salt Lake City and Nashville metropolitan areas all experienced large increases as well.