According to the recently released 2017 Apartment Statistical Analysis report from RubinBrown, the multifamily housing industry continued to experience significant growth in 2016. With 321,000 multifamily units completed, this marks the highest level of completed construction in 20 years.
Rental units continue to be a growing market, not just a temporary correction from the prior recession. In 2016, the market saw a five percent uptick from the averages seen in the early 2000s, even beating 2015’s impressive completion of 306,000 new units. This growth marks the greatest annual increase in new units entering the market in a single year since 1989.
The report also notes that:
- The national rental vacancy rate was at a 30-year low at 6.9 percent.
- The Housing Vacancy Survey showed the number of households who are renting increased by 600,000 – the 12th consecutive year of growth.
- More than 90 percent of the completed units in 2016 were intended to be rentals and more than 80 percent were in properties consisting of more than 20 units.
Despite this record number of new units added to the market, the additions to the rental supply could not keep up with the huge demand. As a direct result of the supply versus demand, rents continue to increase.
“Low vacancy rates, along with the increase in rents, indicates that multifamily rental properties continue to perform well,” said Bryan Keller, CPA, CGMA, Partner-in-Charge of RubinBrown’s Real Estate Services Group. “Looking forward, we can expect 2017 to be another good year for the multifamily housing market. However, there is concern that the rising rents and abundance of new developments will create a growing affordability issue in the years to come.”
The statistical information in the report includes operational data for 2016 and represents approximately 600 apartment projects in roughly 40 states. While these averages are representative of a smaller pool of projects, the trends are usually consistent with those experienced at a national level.
To access the entire 2017 Apartment Statistical Analysis report, please visit http://www.rubinbrown.com/RubinBrown_2017_ApartmentStats.
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