The percentage of new apartment units that were absorbed within three months after construction increased in the second quarter, according to the Census Bureau’s most recent Survey of Market Absorption of New Multifamily Units (SOMA).
The survey looks at new units in multifamily residential buildings with five or more units.
The number of new multifamily apartments finished declined for the second quarter in a row, reaching its lowest level since the fourth quarter of 2023.
Apartments
The percentage of apartments absorbed within three months has dropped dramatically from 75% in the third quarter of 2021, as indicated in the graph above.
Currently, the rate is 48%, which means that 48% of the 98,520 units completed in the first quarter were rented within three months after completion.
The median asking rent in the second quarter was $1,920, a 12.3% increase from $1,710 the previous year.
This is the second consecutive quarter of record-high asking rent in the SOMA survey.
Along with the three-month absorption rate and completions, SOMA also reports absorption rates six, nine, and twelve months later.
70% of apartments completed six months ago (124,300 units) have been absorbed by the market.
Eighty-one percent of the 143,400 flats erected nine months ago have been absorbed. 91% of those constructed twelve months ago (118,700 units) have been absorbed into the multifamily market.
Condominium and cooperative units
The three-month absorption rate for new condominiums and cooperatives dropped four percentage points to 66%.
According to the SOMA, total completions of new condominiums and cooperative units decreased from 2,902 to 2,639 in the first quarter.
Completions of these units peaked at 7,996 in the second quarter of 2018 and have slowly declined thereafter.
[Read more about this topic on Eyeonhousing.org]