Apartment demand skyrockets during summer

by Candyd Mendoza05 Jul 2019

The demand for apartments in the US surged during the second quarter of 2019, with occupancy tightening despite ample delivery of new products.

Net move-ins rounded up to 155,515 units from April to June, marking its five-year peak and beating Q2 2018’s product absorption by 11%, according to RealPage.

Apartment leasing activity in the fast-growing Dallas-Fort Worth area was the most active during the second quarter. Renters in that area secured 10,443 units, while renters in Chicago, Houston, New York, and Washington, D.C., moved into over 6,000 units.

Nationwide, occupancy slightly rose from last year’s 95.4% to 95.8% in the second quarter.

"Apartment leasing activity accelerates during the warmer weather months, and demand is proving especially strong in this year's primary leasing season," said RealPage Chief Economist Greg Willett. "Solid economic growth is encouraging new household formation, and rentals are capturing a sizable share of the resulting housing demand. At the same time, loss of existing renters to home purchase remains limited relative to historical levels."

"While the apartment sector's performance has been terrific of late, the amount of product under construction does point to some near-term risk," Willett said. "Most economists are anticipating a slowdown in economic growth, cooling support for housing demand. It would be tough to maintain price growth with so many new properties moving through initial lease-up at a time when demand has weakened."