Rent growth has slumped for the first time in a year. National year-over-year rates for apartments increased by 0.9% for the second quarter. Rent growth was 1.2% during the first quarter, and it has hovered between 1% and 1.2% since mid-2023, according to a CoStar Group analysis.
In dollar terms, the national rent rate per unit at the end of the second quarter was $1,773, compared with $1,763 at the end of the first quarter and $1,757 a year ago. Quarter-over-quarter, rents rose by 0.6%, slower than the prior quarter’s gain of 1.1%. The apartment vacancy rate remained steady at 8.2% for the third straight quarter, according to the report.
The apartment sector absorbed 151,440 units during the second quarter across the country, a 21% increase from the first quarter, but 9% below absorption during the second quarter of 2024, said the report. Supply additions increased 37% to 175,655 during the quarter, which was 11% below the supply additions recorded during the second quarter of 2024. Supply additions exceeded absorption, a trend that has persisted since the fourth quarter of 2021, but that may soon change as construction starts have been on a downward trend for two years and future deliveries are likely to slow, said CoStar.
Source: Rent Growth Cools Amid Shifting Apartment Supply and Demand
